The following article aims to provide:
- Information on why charting is so important, and how it affects your trading performance whether you know it or not
- The things you should have in mind when selecting your charting platform
Trading is a business and like in any other kind of business you not only have to buy and sell something, but you also have to do it better than your competition, at least if you care to survive long term. Forex and trading any financial market in general is not just a business sector, it can be one of the most brutal sectors for you to compete in, IF you allow it to be. Frequently we see new aspiring traders thinking that trading is as easy as clicking the buy/sell buttons, only to later change their mind to the exact opposite and start believing that trading is one of the hardest things to do. We believe that the reality each trader experiences in the markets mostly depends on each individual trader's knowledge, attitude, and toolbox. Of course no one is born with all the above, we all have to start somewhere and find our way, which means that our own perceived "reality" in the markets can (and will) change over time depending on the knowledge, attitude and tools we acquire on the way.
Supply and Demand trading can open your eyes by improving your knowledge and your understanding of how the markets work, and it can also help you build and shape your attitude on the way, while boosting your confidence as soon as you see it in action and start reaping the benefits. But this article is about the last component, your trading "toolbox". Without some very simple, yet so underestimated tools like proper charting, it will be much harder for you to utilize your Supply and Demand knowledge at its full potential, at least if you prefer to find and evaluate your own levels. Contrary to what the vast majority of traders consider their "toolbox" to be, e.g. indicators, oscillators, EAs and bots, (or whatever else, all of which are not only irrelevant but also unwanted in Supply and Demand trading), in reality a simple but proper charting platform or software is one of the most important tools you can have in trading (together of course with the appropriate platform for order-placement and suitable broker combination, which are the topic of another article).
Saying that "charting is important" might sound like mentioning the obvious, but you have to keep in mind that there are still popular platforms used today that force your chart windows to either auto-resize with your every scroll, or force you to settle for a specific constant ratio, both of which are completely unacceptable to a Supply and Demand trader (as it makes the identification and evaluation of levels much harder and much less efficient than it should be, if not impossible in some cases). Some even restrict your scrolling in specific directions which under some conditions can force you to resize your chart to the point that it is completely distorted and useless (like when trying to view large vertical market moves). You want to be able to resize your charts horizontally and vertically at will and without any restrictions at all, to move anywhere, and scroll to whatever point you want to examine without distorting your picture on your chart.
If on your platform you are not able to do extremely simple things like the above, then you obviously need another platform at least for your charting
You do not always have to abandon your existing platform though. For example Metatrader which is a very popular Forex/CFD platform, is not considered to be anywhere near a proper charting platform, or at least this used to be the case for many years in the past. But some of the best ECN brokers use it and provide a fantastic broker service with it which means that depending on the brokers you have access to, you probably still need it for placing your orders with an appropriate ECN broker. But your charting, market scans, level evaluation etc, does NOT have to be done on the same platform that you use for placing your orders. No one prevents you from using two tools instead of one, so why impose this restriction to your trading by yourself? You can use a proper charting platform for finding and evaluating your levels, and you can use another platform for placing those orders in the market with a suitable broker. For many traders this is the only way to easily obtain access to both tools at the same time. If you want to have everything on the same platform and you are limited to the most commonly available options, then you might have to abandon either the proper charting or the proper broker to place your orders with. This is equivalent to choosing between having either only front wheels or only rear-end wheels for your car, but not both as is absolutely required by common sense and the laws of physics. The main difference here is that you will immediately notice that something is wrong with your car, but you might waste your entire trading career and your wealth NOT knowing that something is wrong with your charting, or your broker, or both.
You might waste your entire trading career and your wealth NOT knowing that something is wrong with your charting, or your broker, or both
Another extremely simple, yet absolutely mandatory tool for a Supply and Demand trader (which is so greatly underestimated, underused, and unappreciated by the vast majority of traders) is the ability to share simple annotations (like horizontal lines or other) between different timeframes. It is something that you might not even know you need until you find a use for it. We cannot even imagine how frustrating and ineffective our daily trading routine would become by missing something so simple, yet there are platforms missing these simple basic functions. Or in some cases, they can share annotations between timeframes but they force you to use infinite lines that forcibly extend both ways instead of giving you the option to have them extend infinitely only to the right, i.e. from your defined level all the way to the right (until price returns and reacts to the level and you manually remove them as they are no longer needed). This clutters your charts and can create unnecessary chaos, but obviously these platforms were not created with the needs of a Supply and Demand trader in mind.
As Supply and Demand traders we are constantly scanning the charts on different timeframes in order to identify those little spots that allow us to stack the probabilities on our side and obtain that lower-risk higher-reward entry for our trades. This means that we are constantly finding areas that require further evaluation on other timeframes for a complete and more accurate picture of what our level can do for us and how to properly use it. This requires the simplest of all things to ask for, like being able to view the same horizontal lines that we placed on our charts when we switch between timeframes, to have them extend only to the right, or to scroll and resize our charts as we see fit without pointless restrictions.
For example when you have found a candidate level on the 1H chart and you have defined it between two horizontal lines, you want to immediately and without complications to be able to switch to the 4H chart and possibly your daily chart in order to view the placement of your level in the "Big picture" (as explained in Enhancer #2 article). Then you also want to easily switch to the 15Min chart to view any details of the level that might not be visible on the 1H chart, and you want your carefully placed horizontal lines to appear exactly as you placed them on the original timeframe. Any further changes you make you want them to be instantly updated and available to you on every other timeframe. Sharing some simple horizontal line annotations between timeframes is really not too much to ask from any platform (that is used for charting purposes), and is really mandatory if you like being efficient and error-free. If you tolerate a disruption of your train of thought and your analysis by your platform every time you switch timeframes or scroll a chart, then you are accepting to have a constant unnecessary obstacle in front of you.
If you tolerate a disruption of your train of thought and your analysis by your platform every time you switch timeframes or scroll a chart, then you are accepting to have a constant unnecessary obstacle in front of you
Your horizontal lines should be infinite simply because when switching timeframes the distance starts to become very relative. This allows you to go to that distant level on a larger timeframe, place your lines around it to define it, and have them extend infinitely to the right (until you remove them after the first return of price to the level). Then you can switch timeframes, further evaluate your level setup, adjust it if you need to, and then after you trade it (on the platform used for your orders) you can even return and monitor your trade on the proper charting platform. Having horizontal lines that extend only to the right is mostly a convenience, but having infinite lines that are correctly and accurately shared between timeframes is vital for a Supply and Demand trader. And all this should be possible without any auto-resizing of your charts by your platform every time you scroll (or having to settle for any constant ratio) that makes your levels stretch or compress beyond recognition without any regard for the context. You want to be able to resize your charts as required in order to see them clearly and to adjust your charts according to recent volatility if you have to. You also want to be able to scroll anywhere, at any time, and under any circumstances. It is really not too much to ask from your platform, these are all very simple and very basic things. Anything less than that simply reduces the clarity of your picture, affects your perspective, and makes it harder for you to arrive to the correct conclusion.
If the above has been indifferent to you before starting to use the Supply and Demand concept in your trading, we can understand this. But if you are now using or trying to master the concept and you are serious about this, then we urge you to find some simple but proper charting platform, even if you just use it for your analysis and not for placing your orders. If you decide to also switch broker then that decision should be completely independent and should be based on your broker's qualities, not just for the charting of their platform. As mentioned above, you can keep the best of both worlds without sacrificing anything.
If you do not want to use the appropriate tools (that are available today even for free), please keep in mind that your competition will use them (your true competition actually already does), and that the difference between who pays and who gets paid is not always as mysterious as you might think. Sometimes crossing the barrier towards profitability might be simpler than others want you to believe. Forex is a zero sum game after all and someone has to lose for someone else to get paid. If you have taken the time to study carefully the information provided by us right here on this website, then please also make sure to use the simple but appropriate tools in order to achieve your full potential. We believe that by openly sharing the information that is needed in order for you to build a strong foundation for your future trading we can create a thriving group of traders and happy subscribers. But in order for this to happen you have to do your part too, especially if you want to identify and evaluate your own levels too instead of only using the ones provided by us. Even if you prefer to only use our own levels as your trading signals, it is always beneficial to understand the background work that has been done for each and every signal. This will also allow you to use the levels more effectively and adjust your trades in real-time according to your own trading preferences and circumstances after you get your high-probability entry.
The difference between who pays and who gets paid is not always as mysterious as you might think. Sometimes crossing the barrier towards profitability might be simpler than others want you to believe
If you do not achieve your trading potential we will not be able to keep you as a happy subscriber either. This means that our interests are effectively aligned with yours, and this is the reason we urge you to start using the correct tools if you are not doing that already. Supply and Demand trading will make so much more sense and be a lot more profitable on a proper chart than if you are not able to distinguish valid levels better than your competition.
There is another thing to have in mind which is not necessarily chart/platform specific but can be affected by your Broker choice too. It is the time shifting of your chart data, especially important on the 4H and Daily timeframe charts. When we say time-shifting we do not mean the time that appears on your chart, but the shifting of price data so that a different subset of it is contained within the candles. The problem here is that many brokers set their platforms to display the price data as if it occurred on a different time-zone instead of using the standard times. This can affect all candles larger than the 1H, simply because they contain a different subset of the same data (which is unrelated to the time on your charts). For example, if the first 4H candle should normally contain hours "A,B,C,D", they could contain hours "B,C,D,E" or any other shifted combination of the same data instead. Although this is the exact same price data and it still creates the same "general" shape on your charts, it will modify parts of every candle and convert candle wicks to candle bodies, or convert candle bodies and make them appear as candle wicks, simply because each candle contains a shifted subset of the otherwise same price data. This might not sound very important, but sometimes it can significantly affect your calculated entry and stop orders and make them less efficient, and it can also cause an increase in the number of missed proper entries during the first return of price to the level.
Also, you want your platform to merge the few European Sunday night hours into the Monday daily candle. When the Forex market opens during Australian Monday morning after a weekend it is still Sunday night in Europe, and due to the UTC/GMT+0 time frequently used on trading platforms you might end up with 6 daily candles on your charts. This means that you have an extra daily candle per every 5 normal daily candles, which not only distorts your charts and your levels on this timeframe, but the extra candle also carries just a couple of hours of trading activity in it and not a full day, thus disproportionately affecting your chart relative to its importance too. You should make sure your platform shows 5 daily candles per week, not 6. If it shows 6 daily candles per week, then you are observing a Sunday daily candle. If you cannot avoid that by using correct charting, then you should have it in mind when trading that timeframe. Also, remember that the daily timeframe might be the "big picture" timeframe as related to a level found on the 4H or even the 1H timeframe chart, which might slightly affect your trade setup even on these other timeframes, at least when you have to define and avoid (or use) the larger timeframe level.
As a final note, generally you not only want to view and evaluate your charts with the same ease and efficiency as your (real) competition, but you also want to make sure that you are viewing the same data in relatively the same way on your charts. This will allow you to always see the picture as close as that which is seen by those that have the power to directly or indirectly affect your trades, and as you get more experience it will also make it easier for you to adapt your entries and exits as you see fit. In any case, there is no real scenario where any irrelevant or even arbitrary distortions like the above might actually work in your favor, so there is no reason to accept such a thing willingly.