It is easier for a trader to view buy and sell signals in chart formation where the active currency can be illustrated as it moves up and down in value. Within charting software there are many mathematical tools available to a trader to help them make a decision whether or not to buy or sell a currency and indeed when.
As I am sure you are aware the forex market just like any other market moves in waves but often in one particular direction known as a trend. It is the buy or sell signal that a trader is looking for to determine the direction of a trend that is all so important.
One of the most basic buy and sell signals used by all traders is support and resistance. You will find that when a currency is moving in a particular direction it will hit a certain level and reverse. You can see that the particular currency may have hit that same level several times in the past, in a buy situation this is known as resistance and in a sell situation this is known as support.
When these support and resistance levels begin to appear over time an experienced trader will use the breakthrough of these levels as buy and sell signals. If a trend is in a buy trend and finally breaks through a resistance level then the trader will use this as a buy signal and if the trend finally breaks through the support level the trader will use this as a sell signal.
Support and resistance is the basis of most traders strategy, although there are many other signals to point a trader in the right direction you will find that no trader will enter a trade until the support or resistance level has been broken.
As I am sure you are aware the forex market just like any other market moves in waves but often in one particular direction known as a trend. It is the buy or sell signal that a trader is looking for to determine the direction of a trend that is all so important.
One of the most basic buy and sell signals used by all traders is support and resistance. You will find that when a currency is moving in a particular direction it will hit a certain level and reverse. You can see that the particular currency may have hit that same level several times in the past, in a buy situation this is known as resistance and in a sell situation this is known as support.
When these support and resistance levels begin to appear over time an experienced trader will use the breakthrough of these levels as buy and sell signals. If a trend is in a buy trend and finally breaks through a resistance level then the trader will use this as a buy signal and if the trend finally breaks through the support level the trader will use this as a sell signal.
Support and resistance is the basis of most traders strategy, although there are many other signals to point a trader in the right direction you will find that no trader will enter a trade until the support or resistance level has been broken.
About the Author:
Adam had been trading forex for years with little success. Adam, at first had no experiance of the forex markets so he joined Colin Atkin's private members club. Colin is a professional trader who shares his trading live, all you have do is copy what he does and take the proceeds. Since Adam joined Colin he has had the cash to invest in other projects.
