What Are Forex Charts and How to Read Them?
Forex charts are important technical tools for traders to study if they want to have a success trading transaction. This chart is the primary tool for technical analysts as practitioners to watch for patterns or noticeable abnormalities in legendary price action. This could help them in order to predict what possible move they should take in the future. If you want to become a successful Forex trader and gain more profit you should be aware of how to read the charts which is very important and quite essential factor for any trader. These charts could show a single period of time and such period could range from one minute to one month to several years.
This chart is an exact illustration and representation of the price history of a currency. With the crammed scope of monitoring and trading global currencies, the importance of Forex charts for best investor cannot be estimated over. After glancing in a few Forex Trading Charts, you may recognize that there are few or little price gaps or there are also times where there are not especially on the charts having longer terms such as 3-hour, 4-hour or daily charts. Trading cannot be considered to be as easy as we think it is. It has been done with a lot of work, discipline, patience and education. Luckily there are also sites which give new set of tools to monitor and administer your Forex Trading.
One good thing about the Forex charts which others before are using, taken in hand in stocks day trading is their easiness for interpreting and understanding. These forex charts can give an in depth look when it comes to the relation of the movements of a certain economy of a country. This may show slow faction with day to day condition which concerns with company reports, and analysts from Wall Street and the demands of shareholders. Charts can be customized depending on your choice. Charting package may also be manipulated in order to view in several different ways.
There are kinds of Forex charts that show actions in prices. These are:
- • Line Chart – this is graph which is a representation of the chronological exchange rate of a certain currency pair in a given period of time.
- • Bar Chart – this is a currency chart that corresponds to the currency price, which forms vertical bars in a day like ever 60 minutes or others.
- • Candlestick Chart – this chart is used to predict the present market which represents opening, closing, highness and lowness of prices as candlesticks with a wick at each end.
- • Point & Figure Chart – this models are essentially the same prototype found in bar charts but Xs and Os are used to market changes in price direction.
Foreign currency charts are easy to understand, especially if you are a previous stock , future trader and investors. To view the history of a price of a stock in chart form, a stock trader has to settle on the ticker symbol of the stock, the chart period (1 day, 1 hour, 15 minutes, etc.). In the forex trading market, this process of using charts is no different, with the exclusion that instead of specifying a ticker symbol, the currency trader states the currency pair he wants to trade.
There are also such types of charts as:
- • Equivolume charts
- • Renko charts
- • Three-Line Break
- • Kagi charts