If you are looking for a Forex charting packages which is very accurate and will supply you with never ending profits all the way then think again. There is no such thing. However, you can drastically increase the probability of successful trading by utilizing a combination of different tools which, when interpreted together, can give you a significant edge in making successful trades.

There are three main areas of analyses generally available for Forex Charting Packages.

Trend Follow Indicators include moving averages, moving average convergence-divergence (MACD) and directional movement index (DMI).

Oscillators - Some of the more popular oscillators at the moment are Stochastics, Rate-of-Change and the Commodity Channel Index.

Sentiment indicators include Put-Call ratios and Commitment of Traders report data.

The above are the basics but you need to combine these with other indicators for a better chance of successful trading. One is the Wave Principal.

Interpretation of the Wave Principal will give additional pertinent data to your existing analysis. Data such as identifying the trend, the maturity of the trend and indicating price targets. Utilizing Elliott Wave Rules on top of this can also indicate when the trend will fail.

Wave patterns in a trend are repetitive and subject to analysis within certain limits. A single wave can be part of a 5 wave pattern, which itself can be part of a larger 5 wave pattern. Once this is known, the pattern, if accurately diagnosed, can be used to predict the next wave, thus enhancing your buying or selling decisions.

Thirteen distinct wave patterns have been identified and analyzed. Naturally, there are numerous additional patterns that occur when two or more of these patterns are superimposed on each other. So, the question you should be asking yourself now is how do I identify where the stock is on the wave?

Forex Charting Packages Interpretation.

Well, if your interpretation is correct, then the prices will rise or fall in the predicted direction. Each wave has distinct attributes that are subject to analysis, for example, if volume is high and prices have dropped to 0.382 (a Fibonacci ratio) of their previous high then you can use these specifics to correctly identify which particular wave you are considering.

The MACD, often seen at the bottom of price charts, denoted as a thin line, is the difference between two moving averages, the 12 period and the 26 period. This line is shown with the signal line, denoted as a thick line, a 9 period exponential average of the MACD line. The normal technique is to buy or sell when these lines cross. However, this technique is crude and can sometimes be erroneous. You will perform better if you can isolate and identify the more subtle indicators that occur within the gross graph.

For instance, check, using your Forex charting packages what happens when the MACD line approaches the signal line but then diverges from it just before crossing it. This could indicate a trend change but always remember this is not an exact science. It should be used as an indication of a possible change, or as an indicator of something to note and verify by other Forex charting packages.