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Why you need more than a 15 min chart to trade the forex?

Forex trading is a complex market with high volatility, and it requires a trader to be well-informed and equipped with proper tools to make informed decisions. Many traders, especially the beginners, tend to rely on short-term charts such as 5 or 15 minute charts to make their trades. However, this approach may not be the best strategy for long-term success in trading forex. In this article, we will explore why you need more than a 15 minute chart to trade the forex market effectively.

1. Short-term charts are prone to noise

Short-term charts such as 5 or 15 minute charts are prone to noise, which refers to random price fluctuations that don’t have any significant impact on the market’s overall trend. These fluctuations can be caused by many factors, including news releases, economic reports, or even the behavior of other traders. Traders who rely solely on short-term charts may find themselves making trades based on these fluctuations, leading to false signals and ultimately losses. Longer-term charts, on the other hand, are less susceptible to noise and provide a clearer picture of the market’s trend.

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2. Short-term charts do not show the bigger picture

Short-term charts only show a small part of the bigger picture, and traders who rely solely on them may miss out on critical information that can affect their trading decisions. Longer-term charts provide a broader view of the market, allowing traders to identify significant trends and patterns that may not be visible on shorter-term charts. This information is crucial in making informed decisions and avoiding unnecessary risks.

3. Longer-term charts provide more reliable signals

Longer-term charts provide more reliable signals than short-term charts, as they are less prone to false signals caused by noise or other random factors. Traders who rely on longer-term charts can identify significant trends and patterns that have been in place for days or weeks, providing a more accurate depiction of the market’s overall trend. This information can be used to make informed trading decisions and avoid unnecessary risks.

4. Longer-term charts are more suitable for long-term strategies

Longer-term charts are more suitable for long-term trading strategies, as they provide a more accurate view of the market’s overall trend. Traders who rely on short-term charts may find themselves making trades based on short-term fluctuations, leading to losses in the long run. Longer-term charts allow traders to identify significant trends and patterns that have been in place for days or weeks, providing a more accurate depiction of the market’s overall trend. This information can be used to develop long-term trading strategies that have a higher chance of success.

5. Longer-term charts allow for better risk management

Longer-term charts allow for better risk management, as they provide a more accurate view of the market’s overall trend. Traders who rely on short-term charts may find themselves taking unnecessary risks, as they may be trading based on fluctuations that don’t have any significant impact on the market’s overall trend. Longer-term charts allow traders to identify significant trends and patterns that have been in place for days or weeks, providing a more accurate depiction of the market’s overall trend. This information can be used to develop trading strategies that minimize risks and maximize profits.

In conclusion, relying solely on short-term charts such as 5 or 15 minute charts may not be the best strategy for long-term success in trading forex. Longer-term charts provide a broader view of the market, allowing traders to identify significant trends and patterns that may not be visible on shorter-term charts. This information is crucial in making informed decisions and avoiding unnecessary risks. Longer-term charts provide more reliable signals and are more suitable for long-term strategies, allowing for better risk management and higher chances of success.

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