There are two theories as far as the importance of live charts for Forex trading is concerned. One theory is that live Forex charts are not effective for making successful trades based on them, due to the fact that they rely on supply and demand fundamentals. The second theory is that the graphs are a mirror reflection of the traders’ minds, which makes price changes predictable.
The truth is that live charts can indeed deliver great results if properly read and interpreted. Nevertheless, one of the most common misconceptions regarding Forex graphs is that you can accurately predict future variations of pair prices. This is false, because the prices of different pairs of currencies are not determined by fixed factors and aspects. If they were, there would be no point in trading currencies, as everybody would know the future values. However, live graphs are still useful for Forex trading. If you combine them with technical analysis you can have some of the most valuable assets in this business.
In order to understand how live Forex charts work, consider that the price is equal to the supply and demand added to the investors psychology. Also, the fundamentals, which are the supply and the demand are less important, as their value is determined by the constantly changing course of events. Live charts and technical analysis work based on the assumption that the supply and demand are discounted, which makes the prices to be the actual determinants of the price changes.
live charts should rather be considered works of art than science. Extended research and experience will tell you that they do not have a fixed pattern, even though they are not entirely unpredictable. You still have to rely on them to be successful in trading currencies, but you have to use them positively, looking at them as tools that help you understand the big picture of Forex trading.