Introduction to Forex Charts

June 19, 2013

Before even thinking of venturing into the world of trading, it is necessary to understand chart reading: the basis of all Forex analysis.

There are a number of different Forex charts to know and recognize. Let’s start with the simplest: Line charts show a simple line tracing the evolution of the asset price. The time can be marked in minutes, hours, days, months or even years.

The Bar Chart: Each bar on the chart shows the starting and ending of an interval of time, as well as the highest and lowest price that the asset reached in that period. It gives us a good idea of the asset’s volatility.

The most important perhaps is the Japanese candlestick. Each interval of time is represented by a wide bar with a narrow wick at the bottom and top so it looks like a double-ended candle. When the candle is green it means the rate has gone up: the lowest point of the wide bar shows the opening price and the upper end indicates the closing price. The ends of the wicks show the highest and lowest prices that the asset reached in the interval of time.

These live Forex charts are the key to picking up price trends at an early stage. You will buy the currency pair if you notice an upward trend and sell if you see a downward trend developing

The most important decision you will have to make when using these currency charts is what the time interval will be. These can range anywhere from a minute to weeks or even months. This becomes especially relevant when you are trading based on events on the economic calendar. When you are using purely technical analysis, the tools you use will be more or less the same whether you are using a 5 minute chart or a one hour chart. You will just have to be careful to keep the trade open for the right amount on time. If you are also using fundamental analysis however, you will have to anticipate when an event will change the trend and for how long.

Before throwing yourself into your trading do not forget to practice reading charts as much as you can so that you feel completely at ease by the time you begin trading for real. Charts are your most important analysis tool. No matter what trading strategy you use, charts will be a major factor.

Publication source
UFXMarkets information  UFXMarkets reviews

September 30, 2016
The Traders Triple Chase contest
We would like to invite you to take part in the FIBO Group, Ltd “Trader’s Triple Chase” contest that will fit the traders with different backgrounds. It is free to participate in the contest, its first round starts every week and the real money prizes are granted weekly...
September 29, 2016
October 28, 2016. MENA FOREX & Investment seminar in Dubai
We have decided to combine the most relevant topics at the moment and we are glad to invite you to the Oil, Gold and the US Presidential Elections seminar...
September 29, 2016
Grand Capital headquarters moved to a new office
Modern infrastructure is a major aspect for any company. That is why to assure comfortable environment for both employees and clients, Grand Capital moved to a new spacious office, which is located in walking distance from Moskovkie Vorota subway station...

XM Rating
OANDA Rating Rating
Fort Financial Services Rating
FIBO Group Rating
FBS Rating

OptionBit Rating
Empire Option Rating
OptionRally Rating
TopOption Rating
IQ Option Rating
TropicalTrade Rating