I’ll do stocks first, since it’s easier and more universal. Also, I find the real indicators like RSI, MACD, Stochastic etc work better on stocks than they do on Forex. Pictures will be shown below to illustrate how to add indicators.
- Usually with stocks, you want to view the last 6 months for daily charts and the last 2-4 years for weekly charts.
- Most charts should already have the volume bars displayed already, if not, then show it. Stock charts usually has it as default. Volume is good because it’s recorded accurately with any chart since it’s just number of shares traded for that one company. This will differ for forex.
- Go ahead and add the basic RSI and MACD with their default settings, almost everyone uses these.
- If you’re using StockCharts (free) you usually have 1 more indicator slot. Let’s go with the Full Stochastic.
- Next up, are moving averages, helps with trending. Most people use SMAs over EMAs (Simple vs Exponential). I would recommend adding the 50 SMA, 100 SMA and 200 SMA.
StockCharts – Chart options and what the result looks like:
FreeStockCharts – Adding Indicators and the results:
Just a note, you will probably use intraday charts to enter your trades, but always look a the big picture first before entering. That’s why most of the analysts use longer timeframe charts to show indicator/patterns for stocks anyways.
Forex
The popular online charting site would be FreeStockCharts, enter the FX pairs in the format EUR/USD. Although that might seem rhetorical, some charting sites require you to enter pairs as EURUSD or some other type of format.
For forex, given the volatile movement of FX pairs, most traders are short term, so I recommend the 5min, 15min, 30min, 1hr charts. If you’re more into swing trading, then the 4hr and daily charts might be better for you.
- Whereas I recommended indicators such as RSI, MACD, Stoch for stocks, they are still valid here in FX. Just not that useful for the smaller timeframes.
- For smaller timeframes, a good start would be to copy the 5Min PASS system that I posted in the Free systems section. Although you can’t add the heiken ashi indicator onto FSC, you can still use the EMAs which copy the heiken ashi plots.
- Go ahead and add the 6EMA, 12EMA and 48EMA.
- I also like to use Bollinger Bands with the default setting of 50 2.
- Don’t bother with volume, you’ve probably heard this before, over 3-4 trillion dollars are exchanged on the foreign exchange market everyday. How do you track that much volume? It’s not possible, each FX broker provides it’s own volume so there’s no “one” volume that collects them all. Hence, I don’t use volume on FX.
FreeStockCharts – How to add them is exactly like the above, the result should look like this (I’ve customized the colors for my chart). To change background color to white, go to Settings > Properties on FSC.
That concludes this tutorial for indicators, next up is Technical Analysis aka understanding what your indicators are telling you.