Technical analysis is very important to most traders as it provides the back bone of your trading system whether you will be a day trader or a swing trader. And the beauty of this you can apply it to any market or time frame, you just have to take the time and do research on which indicator set you would like to use.
Chart Types
Time Interval
Now most traders use time charts to apply their technical indicators. A time based interval chart is easy described as a brand new candle is printed at the certain time you have choosen on your trading charts, to use a five minute cahrt as an example a new bar will occur at every five minute time interval..
The greatest gain of time based charting is that evey forex broker have them in their trading platform once you have an active chart..When time is the only consideration though, important things like volume and trading activity have no affect on the chart as the same number of bars will print everyday no matter what happens in the market.
Now these are my personal favorite so I may be a little biased here as I trade them exclusively as they give me a better over view of the price action.tick charts can give you as the trader another tool to get more information from the currency market which can be very benefical to any trader.. TicK based trading charts are calculated on the number of orders per candle,this will be significant as you can view if the price action is slow or fast depending on market volume.. As an example a 144 tick chart needs 144 orders to be filled in the market prior to a candle forming and the same as a 610 tick chart when 233 orders are filled in the market to form another candle..
Analysis can be done on larger timeframes as well not just the smaller dya trading styles such as an 89 or 144 tick chart.A 375 or 610 chart are also possabilities for swing trading depending on the market.. I apply a 610 tick chart to gauge the overall trend of the market I personally trade..
These charts are a cost item which is a short coming but to overcome this issue you download ninja trader at no cost and link it to a data provider and then access live market data that way.. But as a trader do you think that it would improve you trading or help with your analysis of the market, I think you might be quite surprised the information that can be taken from them.
These are similar to tick charts so if you use a 2000 volume chart when 2000 transactions are completed a new bar will form. A large number of traders use Fibonacci numbers to pick what size volume chart they would like to apply to their trading..
Range Bars
Range bars are based on the changing of price at a certain range you choose. As an example a 10 bar range chart on the Russell emini means taht when the bar opens at 583.0 is when a new candle will be printed once 584 is reached..0 is reached if going long or 582.0 if going short in the market you are trading.. By their nature a whole new.
In periods of consolidation range bars are a definite benefit to any trader.. In these times during the trading day fewer bars will be printed which in turn will help eliminate some of the market noise.
Overview
As you can see there are significant advantage over time based charts using tick, volume or range bars,but unfortunately you will have to purchase a data feed into ninja trader if your broker is not compatible (refer to their websites as many brokers are ). New currency traders who are on a budget can quite effectively just utilize the charts made available to you through your broker.. When your knowledges and confidence grows these are something you may wat to consider as options.. This is a currency trading for dummies view on charting but this is really a valueable strategy idea to consider.