Putting charts side by side is a common practice in Forex trading. It allows traders to compare multiple currency pairs, timeframes, or indicators simultaneously. This technique is especially useful for technical analysis, as it helps traders to identify trends, patterns, and correlations that may not be visible on a single chart.
To put charts side by side, traders can use various trading platforms, such as MetaTrader 4, TradingView, or NinjaTrader. These platforms allow users to customize the layout, size, and position of multiple charts on the same screen. Traders can also save their preferred layout as a template, which can be easily accessed and modified in the future.
Once the charts are arranged side by side, traders can start analyzing them. Here are some tips on how to read multiple charts in Forex trading:
1. Choose a common timeframe: To compare different currency pairs, traders should choose a common timeframe for all charts. For example, if they want to compare the EUR/USD and GBP/USD pairs, they could choose the 1-hour timeframe for both charts. This will help them to see the price movements and patterns of both pairs at the same time.
2. Identify trends: Traders should look for trends on each chart and compare them. They can use trend lines, moving averages, or other indicators to identify the direction of the trend. If two or more charts show a similar trend, it could indicate a strong market sentiment in that direction.
3. Look for divergences: Traders should also look for divergences between the charts. For example, if the EUR/USD chart is showing a bullish trend, but the USD/JPY chart is showing a bearish trend, it could indicate a possible correlation between these pairs. This could be due to a common factor, such as a change in the US dollar index.
4. Analyze correlations: Traders can also analyze correlations between different currency pairs. Correlations show the degree to which two or more currency pairs move in the same or opposite direction. Positive correlations indicate that the pairs move in the same direction, while negative correlations indicate that the pairs move in opposite directions. By comparing multiple charts, traders can identify correlations and use them to their advantage in their trading strategy.
5. Use multiple indicators: Traders can use multiple indicators on each chart to get a better understanding of the market. For example, they could use the Relative Strength Index (RSI) to identify overbought or oversold conditions, and the Moving Average Convergence Divergence (MACD) to identify changes in momentum. By using multiple indicators on multiple charts, traders can get a more comprehensive view of the market and make more informed trading decisions.
In conclusion, putting charts side by side is a useful technique for Forex traders who want to analyze multiple currency pairs, timeframes, or indicators simultaneously. By comparing and analyzing multiple charts, traders can identify trends, patterns, correlations, and other factors that may affect their trading strategy. However, traders should be careful not to overload themselves with too much information and should always keep their trading plan and risk management strategy in mind.
