The popularity of the daily foreign exchange market has picked up pace. At present nearly every trading market anywhere in the world relies upon the foreign exchange (Forex) currency market. In spite of the fact that the Forex market might be teeming with pro traders yet there is still a chance for you to become a prosperous trader. For earning profits on a permanent basis a trader ought to be mindful of the fact that a significant role in trading is held by the charts. By employing charts in trading, a trader is saved from the trouble of focusing on the significant trading aspects at all times.
The key functionality provided to traders by using charts is that using it permits a trader to estimate the most significant and important of all major investments in any of the shares or currency. If the aim is to succeed in the market then a trader needs to have an understanding of the Forex graphs. Employing Forex charts in trading enable a trader to find out the existing trends and price dynamics of the market.
The use of Forex charts has come forth only recently owing to the advancements in computational technologies. In contrast to the previously used key outlooks and news headlines, Forex charts have become the key element in analyzing market behaviours.
How to read charts – see full forex course video from FXCM:
There are four kinds of operations presented by charts in the simplest of trade terminals; bars, candlesticks, knots-and-crosses and lines. Till the present day, the most popular of these four kinds are the Japanese candlestick presentation dues to its usability. Charts based on candlestick model make it easier to determine indicators or some other markers.
It is essential for all traders to employ Forex charts in their trading. Working without the charts poses a lot of risk of losing money. Currencies fluctuate by every passing minute or second which makes Forex charts a very useful online trading tool. Using charts a trader can make profit out of even the seemingly non-existing market movements.
The key component of succeeding in Forex market is the working flexibility offered to a trader through charts. The objective must be to follow the progress on the charts very closely and the trader will eventually reach the goal of success.
Through use of charts a trader is allowed to observe even the tiniest of currency rate fluctuations. This makes up the recipe for a successful and beneficial international currency market Forex trading.
See there are three charts which are most popular:
1. Line Chart
2. Bar Chart
3. Candlesstick Chart
Let’s explain importance of each chart which you must know very well.
More complex is the bar chart. Bar chart shows the ups and down and open and close prices too. The top bar shows the highest paid price, while the bottom vertical bar shows the low traded price time of period.
Vertical self bar shows currency pair’s of total trading range.Left side horizontal hash of bar is opening price, right side horizontal hash is closing price.Note, “Bar” word you find in whole lesson in the reference of data on a chart to a single piece. A bar is just a single segment of time, may be a day, a week, or a hour. Be sure and understand on which time its referring.The other name of the bar chart is “OHLC”, because it shows Open, High, Low and Close to particular currency.
Open: Small horizontal line in left is opening price
High: Top vertical line indicates highest price of time period
Low: Bottom vertical line indicates lowest price of time period
Close: Small horizontal line in right is close price
Candle chart is the same like bar chart of prettier, graphic model.
Candle stick bar shows from high to low-level with vertical line.
In candlestick chart the big block in the center shows the level between opening and closing prices.
Suppose block is in center filled with colored it means currency closed in lower and it opened as per traditionally.
Black block in top is opening price, and bottom block is closing price. Suppose block with white, hollow or unfilled it shows closing price higher than opening price.
Color television attracts more than the black/white television, in same way splash of some color in candlestick chart.
Substituted to green in spite of white, red in spite of black. Means suppose price close higher than open, candlestick would be in red.
The price closed low than opened, candlestick changes to red.
In later chapter, how green, red candles will shows to ‘see’ things on charts in fast, such up/down trends possible in reversal points.
Remember we used green red candlesticks in spite of black,white now we start using these colors.
Candlestick charting purpose is strictly to visual aid, the exact information appears on OHLC chart.
The benefits of candlestick chart are:
. Candlestick chart is so easy to interpret in good place, specially beginners to start chart analysis of figuring out.
. Candlestick chart is easy to use and its clarity to eyes fast information in bar notation. Plus or research shows visuals in studying, it help well trading too.
. Candlestick chart is also called shooting star, it helps to remember means of pattern.
. Candlesticks are good in identifying the marketing turning points-which reversals up-down and down- up trend.