Forex Chart Pattern Analysis: Introduction
Have you ever seen a stock chart or forex or commodity? You are ‘stray’ reading this article must 99% have ever seen the graph. For those who have not please read the first understanding of the graph in the article How to Read Three Type Graph Price on MT4. Most traders will see price movements on daily, weekly and monthly charts to see trends and patterns.
History Repeat Itself
Yes, this phrase phrase is always there for traders who want to see patterns on the chart. Analysts or traders who perform technical analysis, understanding charts and chart patterns is the first step to predict or forecast the upcoming price movement. Graphs provide broad information even with narrow time frames.
If you see a pairs graph with daily timeframes only, you can quickly describe what happened to the pair. Based on the price movement displayed daily timeframe graph, you can mention that the pair is experiencing an increase or decrease in that period.
Technical analyst or technical trader can also determine how much fluctuation that occurs at any given time just by looking at the graph. So with the graph, you can tell which pair is fluctuating and which pair is stable.
Conceptually, the graph also illustrates the ‘struggles’ between buyers and sellers. The increasing price means that the buyer dominates the market rather than the seller. Meanwhile, declining prices mean that sellers dominate the market compared to buyers. The concept of ‘buyer’ and ‘seller’ is also commonly equated with ‘supply’ and ‘demand’ a pair (concept of supply and demand).
The graph of a pair that is displayed in a particular timeframe on MT4, often gives an image of a pattern whose impact can be the same as before. The picture of the pattern in question here is like the form we often encounter in life.
Based on the history of repeats itself (although still in debate), the appearance of this chart pattern can be an initial step for the analyst to setup and formulate a trading plan (trading plan).