Daily forex chart analysis is not just for traders who have a limited amount of time to look at their charts. Smart day traders can make good use of larger time frame analysis to get a better handle on potential price action for the current day’s trading action.
Once believed to be a long-term trader strategy, daily forex chart analysis has become extremely common among swing traders. Looking to capitalize on a two- or three-day move, swing traders often analyze daily candles and bars to identify trading opportunities.
Even day traders, who often use 5 and 15 minute bars for scalping, will take a close look at the daily trend before beginning their trading sessions. If a scalper can analyze a longer-term chart and recognize an overall downtrend, they may want to consider only shorting during the session. Many successful day traders have stated that they should first have a daily bias for the overall trend, before trading the smaller charts.
Another group that regularly reaps the benefits of daily forex chart analysis are traders who have regular full-time jobs. These traders only have a few hours in the afternoon to examine their charts for some developing opportunities. All they really need is to isolate a daily candlestick setup for the next day and set their order triggers.
However, using daily forex chart analysis requires some practice. As with anything else in the Forex world, experience and patience are key. Having a trading strategy that gives good entry and exit signals doesn’t hurt either. So many people start trading without a solid forex system that it really is no wonder why 95% of all market participants lose money. There will never be a way to make money trading without a profitable trading strategy.