You can make money by using Forex charts but a lot of traders lose and the errors which they make can be seen below. Please have a look at the mistakes that you should avoid.
Trading Invalid Data
You need to use data which can help you to calculate the chances and that means for you to use enough data to allow you to do this. This is good sense, a big number of new traders still try day trading – it does not work PERIOD. All volatility is too random in short time frames and support and resistance levels are meaningless. You can not get the chances in your favor and you can not win.
Forecasting Without Confirmation
Maybe the most common mistake of all is that new traders simply love forecasting but this is really relying on hope or guessing and in any money making
venture, when you rely on hope you will lose most of the time. E.g. instead of buying a dip to support and hoping that it holds, you should see prices turn up and CONFIRM support has held before
opening your trade. When you have never used momentum indicators before, then you should learn about them and use them. Two good ones are the stochastic and Relative Strength
Not Buying Breakouts
A lot of traders are obsessed with “buying low and selling high”. When they see that market prices breakout above a new high, they want to wait for a pullback to get on board. Generally if market prices break to the upside above strong previous resistance, they do not pull back. You have to learn to buy breakouts when you want to catch the best trends based on this fact: Most major trends start from new market highs and NOT from market lows. So when you don not buy breakouts you are missing out best potential trading possiblities. Please have in mind: “Buy high sell higher” is the key for you.
Not Being Objective
When you are too subjective your opinions get involved and so do your emotions, so try to stay objective. You should avoid indicators which involve too much subjectivity - e.g. as Elliot wave - cycles or any other indicator which is not objective.
Using Indicators Incorrectly
A good example would be the big number of traders who buy dips to moving averages – this is a lagging indicator! Or buy and sell the outer Bollinger bands – this is a volatility indicator! None of these indicators should be used to open trades on their own.
Using Too Many Indicators and Curve Fitting
When you use too many indicators in the Forex charts to generate Forex Trading signals you will lose. In Forex technical analysis easy strategies work best, as there are less elements to break in the fast changing financial market. So less is more if using indicators and inventing your Forex trading strategy.