Today a trader can easily find forex charting services on the net, some of which are offered for free. The charts provide the necessary data to keep up to date with the price movements of the selected currency pair and therefore are one of the useful tools in forex trading.
The question many of you ask is whether the free charts are any good? Why are they offered without any fee attached and whether you can actually trust them?
Let’s first clarify the lack of a fee. The reason behind this is to get as many customers as possible and later on try to sell them something extra.
Consider a free sampling in the supermarket. How many of those who try, grab the product and put it in their shopping carts? In my experience, more than half (mostly because a lot of us go shopping on an empty stomach and everything taste good!!).
Now in our case, you get a chance of trying the free charts, however most probably not all the available functions are available for a free product. Once you sign up and start using the charts, the company providing the services will do its best to convince you for better charting features for just $9.99 per month ( this is just a theory… the actual prices vary!).
Other possibility is that the service provided will try to sell you another trading product or tool, such as, for example, expert advisors or trading signals.
Last but not least, most forex brokers offer great free charting software. In return, you have to open an account with them. Sounds fair, doesn’t it? After all, if their charts are accurate why not sign with such brokers?
We all love free stuff and sometimes overlook much more important things. For example, lots of traders hunt the best first deposit bonus, instead of focusing on trading features of the broker.
Same goes to charts… Don’t hunt the free; instead try to find the best. Occasionally, some of the great services are offered for free. On the other hand, is it really free if you do buy an extra feature? Or start trading with the broker? Or buy an awesome expert advisor? I think you got my point.
I personally prefer the charts provided in the trading platform of my broker, however the charting services offered separately from the broker are also considered to be rather reliable. In most cases those charts get their data from a broker anyway!
The only problem you might notice is the slight delay between the actual market and what is given in the free charts. However, generally, the data presented can be relied on and traded with.
As for the actual forex chart types, there are several features and indicators that allow you to create truly unique view of the price action. Together with various time frames, the charts are the trader’s best friend!
The most popular chart types are:
Line Charts with the average daily price or closing price over the selected period of time
Bar Charts with high/low and two ticks (one for opening and one for closing price) for your currency pair
Candlestick Charts with line of high/low and body of open and closing price. Different colors represent upward or downward movements.
The most popular indicators, the truly must-have for any trader, are Moving Averages, MACD, Relative Strength.
Lastly, the time frames need to be as flexible as possible ranging from 1 minute to monthly charts. The good charting provider needs to offer simultaneous two or more timeframes view in order to compare short term and long term trends.