Forex analysis tools
A foreign exchange, or “forex,” trader needs to view information that can’t be gleaned from the usual price charts. They use technical analysis tools to gain additional insight and, although references to these tools sound like gibberish to the uninitiated, they are simple enough once explained. Generally, they use statistics, chart overlays, forex analysis tools technical indicators to help forex traders make better-informed trading decisions.
Every weekday, barring local holidays, Europe opens, followed by New York, then Sydney, and then Tokyo. London is open again before Tokyo closes. Many smaller markets open and close throughout the day and night. Global markets vary in size, in both their number of currency transactions and how currency traders they have. That means each session in each market has different characteristics in their currency “pairs,” or the comparison of the value of the home currency against another currency. USD currency pair is most active during the London and New York sessions, because these currencies are associated with Europe and the U. Many forex traders find it useful to separate the various sessions on their charts.
A session highlighter shows the price action that occurred during the various sessions, by the minute or by the hour. The session highlighter automatically draws vertical lines on the price charts when a major session opens or closes. Alternatively, the trader can use colors to visually highlighting the various trading sessions. There are numerous session highlighters available which can be added to the forex trading platform. MT4 is among the most popular. A forex volatility tool shows how much a currency pair typically moves. A trader may want to look at average daily movement over 30 days, for example.
The tool can show how much the pair typically moves each hour of the day, how volatile it is on a certain day of the week, or how its volatility has changed over time. These tools provide insight into what can be expected on a particular day or at a particular hour. This information helps the trader assess whether a trade has a good chance of reaching a profit target. A volatility tool can’t tell the trader which direction the price will go, but it does indicate how much the price might move. Forex volatility tools vary in complexity and format.