A basic skill that day traders need is to know how to read charts for day trading. A chart is a display of information about trading volume, prices, historical highs and lows, and current trading price for commodities, futures, currency pairs, or stocks. A chart may include information about metrics such as the 50 day moving average as well. Day traders use charts that are set up to track market movements by hours and minutes while swing traders use charts set for days, weeks, or months.

How to Set Up Charts for Day Trading

The point of working from a trade station with charts for trading is to make your job more successful and easier. Traders need to be able to track the market position on what they are trading and to have a view of the broader market. While you may be trading corn, soybean, coffee, or gold futures, you will want to keep an eye on how the S&P 500, NASDAQ, DOW, and major foreign markets are doing as the greater economy also affects commodity prices. You will need to follow enough charts to get the information that you need while not filling your screen with too much extraneous information that only distracts from your work. And, you need to set up a time frame that matches how you are trading.

What Timeframe Should I Use for Day Trading Chart Analysis?

While market timers may set up their timeframe to track by the hour, day, week, or month, scalpers need to work from five minute, fifteen minute, or hourly trading charts. Swing traders commonly use fifteen minute, hourly, and daily charts. Day traders enter and exit trades within a single trading session. Thus, day traders need to be working from charts that track commodities, futures, currencies, or stocks by intervals as short as 5 minutes up to as long as an hour.

The TradeSafe System incorporates optimized settings for each market traded rather than generic settings for greater accuracy and determination of trend strength.

Which Chart to Use for Day Trading?

A common comment from new day traders is that the market for their commodity futures or stock seems too volatile and confusing when they use a one minute chart. The truth is that the market is not any different when you use a one minute chart versus a five minute chart versus a tick chart. Many day traders find it useful to use tick charts. These can be set to update with every trade or for any number of trades you choose. We generally suggest that as the day progresses and trading volume increases to increase the number of trades per tick.

Which Chart Is Best for Day Trading?

The best chart for you to use for your day trading will be determined by how you trade and what you trade. Day traders need to use short intervals like a minute or five minutes or tick charts set to a small number of trades. As mentioned above, the TradeSafe System generates customized chart settings for greater accuracy and trend strength determination. On the other hand, swing traders who may hold a position for hours, days, or weeks, need to work with longer intervals. When the news relating to the commodity on which you are trading futures is active, you may wish to adjust your interval to better track a volatile market. And, you may wish to increase the rate of updates on your news feed.

What Minute Chart Is Best for Day Trading?

All charts for day trading display the same market information. But, how they display that information can be quite different. Two unique display types are Japanese Candlesticks and Renco chart “bricks.” Both of these use a display symbol that shows highs, lows, and market direction for a given time interval. Sometimes during really high volume trading a minute charts looks overly volatile. At those times some traders choose to switch to a tick chart that tracks by number of trades instead of time interval.

What Is the Best Charting Software for Day Trading?

At DayTradeSafe we prefer NinjaTrader as the best charting software for day trading. This platform gives you real time futures data along with a trade simulator and advanced charting options. With NinjaTrader you can develop strategies and do back testing. The platform lets you connect directly to the NinjaTrader Brokerage, TD Ameritrade, Interactive Brokers, or any other broker of your choice. This platform can be easily customized with any of thousands of apps.

What News Moves a One Day Chart on Forex Trading?

Forex markets are open around the clock on every day that the market is open. Pronouncements by central banks in either country happen during their daylight hours. Traders who want to take advantage of breaking news that relates to the currency pair they are trading should be trading in a major Forex market (Tokyo, New York, London) that is open during daylight hours for at least one of the countries whose currencies they are trading.

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