One of the best ways to really get your profits soaring in foreign exchange is through the use of forex charts. This along with technical analysis will help you in determining when to invest, what to invest in, and how to increase the profits you will earn through trading. The combination below will definitely be a great addition to any trader’s forex trading strategy so as long as you follow the 3-step process:

1. Looking at the Weekly Trend

Though very few forex traders view the weekly charts, these charts can actually tell you what the important and long term trends to invest in are. These trends are usually separated from the short term and unstable ones, which is why you have to check the weekly charts once in a while to find out.

2. Checking the Daily Chart

The same rules apply with the daily chart, which means the same important price levels are lining up on both charts. Remember that the purpose of viewing the charts is to look for validity and resistance in trends, which means there is a tendency that a stop or a break will occur between these levels, which can possibly develop into a new trend in the markets.

3. The Importance of Price Momentum

In the end, the best way to find out if a break is progressing or not is through the price momentum. There are two types of price momentum indicators that are usually present in currency trading: 1) Relative Strength Index and 2) the Stochastic.