What Is Forex Trading Chart & How To Read Forex Chart?

[somrat4030]

Forex Forum, The best place for learn more about Forex trading chart.​

What Is Forex Chart?​

A chart in Forex is a visualization of the bid and ask price movements of the currency pairs and is represented in lines, columns, or in any other form. These price movements can be expressed in different time frames: minutes, hours, days, months, even years.

Currency exchange charts show the price movement this way: the x-axis (horizontal line) shows the time period - which can be anywhere from a tick data (the smallest price change of a Forex pair) to a yearly data, - and the y-axis (vertical line) shows the price of a pair.

Types of Forex Chart Patterns​

Chart patterns are classified according to the signals or directional cues that they provide to traders. Here are the 3 types of chart patterns:


1. Continuation Chart Patterns
Continuation chart patterns form during an on-going trend and they signal that the . Continuation chart patterns usually occur during price consolidation periods and offer great opportunities for traders to open positions in the direction of the dominant trend. The most common continuation chart patterns include directional wedges, flags and pennants.

2. Reversal Chart Patterns
Reversal chart patterns form when a dominant trend is about to change course. The chart patterns signal that a prevailing trend's momentum has faded, and the market is about to reverse. If there is an uptrend, a reversal chart pattern signals that the market is about to turn lower; similarly, a reversal chart pattern in a downtrend signal that the market is about to turn higher.

3. Neutral Chart Patterns
Neutral chart patterns occur in both trending and ranging markets, and they do not give any directional cue. Neutral chart patterns signal that a big move is about to happen in the market and traders should expect a price breakout in either direction.

The Importance Of forex chart​

You may not like the technical option at first, but you have to try to love looking at it hours after hours if you want to get the winning trades.

Things might seem easier for the beginner, and they rush towards the Forex market and lose a great deal of money without having proficiency in reading the chart. In a blink of an eye, thousands of dollars can vanish if the investor does not follow the right strategy based on the data of the chart. Before the execution of the trades, every time an investor asks himself if he ready for spending sufficient time with the chart or not.

How to read forex charts​

Being able to read and interpret forex charts accurately is vital if you want to successfully trade in forex markets. Learning how to read live forex charts, as well as real-time trading charts, will enable you to take control and spot trends, allowing you to make calculated moves to seize opportunities to make money. Forex charts show a period depending on the time frame you select, most forex charts default to a daily time span showing trading data over a 24-hour period. But this can be changed to time frames that represent minutes or even months depending on your requirements. This ability to transverse forex charts over both short and long periods of time enables you to fully monitor the fluctuations in currency rates. For learn more about forex chart click here..

How do Forex Chart Patterns Work?​

Forex chart patterns are normally seen in historical data, analysts find these technical indicators and if the pattern has repeated itself multiple times with the same outcome in the historical data a trader will try to predict when this pattern will emerge again and then enter a position based on this historical data.

Flags and Pennants
Similar to triangles, flags and pennants are among the commonest of all chart patterns. They appear regularly in both up and downtrends across all time frames.

Generally, the pennant will be more like a triangle in appearance than the squarer looking flag. However, the precise formation is much less important for us as traders than an understanding of the underlying price action, which is very similar in both cases.

You can learn more about forex trading at forex forum.

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[LamarKenyon]

As a trader one must know to read the forex charts. This post explains how to read these charts and their importance.

 

[Unellene]

Correctly reading forex charts is crucial in order to be successful. A forex chart contains information on past prices of the currency pair, and it is just as important to know how to read these charts as it is to have an understanding of what moves the market.

 

[smithanderson]

@somrat4030 Firstly thank you for sharing this noteworthy post. I feel that one who wants to trade fruitfully must know how to read forex trading charts. It is the foundation of a sound trading career.

 

[somrat4030]

@somrat4030 Firstly thank you for sharing this noteworthy post. I feel that one who wants to trade fruitfully must know how to read forex trading charts. It is the foundation of a sound trading career.

Thank You

 

[Polakandil]

In Metatrader 4 there are three types of chart, candlestick chart, bar chart, and line chart, from the three charts the most used is the candlestick chart because it is easy to read and giving detail price open high low, and close, although bar chart also provides OHLC, however, more convenience to use candlestick chart.

 

[brentcrawford]

To understand and read the forex trading chart, a trader needs to know some common forex trading chart patterns. Understanding the chart patterns can help to anticipate price movements and make better trading decisions.

 

[somrat4030]

To understand and read the forex trading chart, a trader needs to know some common forex trading chart patterns. Understanding the chart patterns can help to anticipate price movements and make better trading decisions.

Yes, first need to understand chart patterns.

 

[Kristine Christensen]

The foreign exchange market is a decentralised global market for the trading of currencies. This market determines the foreign exchange rate. It includes all aspects of buying, selling, and exchanging currencies at current or determined prices. To read the chart, you must understand the forex market basics and how to use and read a candlestick chart.

 

[Snicket]

This is a knowledgeable post. I would like to add that along with learning to read chart patterns one should also continue practising the teachings in demo trading. It would help you understand the patterns even more clearly.

 

[GriderGlib]

Understanding the chart pattern and being able to to read charts helps the trader to make trading decisions logically and rationally. It is the very foundation of successful trading.

 

[brendalloyd]

The graphical depiction of the historical price movements is not easy to read for all traders. But no matter how reluctant you feel while reading these, they work great in helping you observe, analyse, and predict the future price movements if read properly. You can make use of your favorite trading tools and indicators to decide which way you want to go.

 

[brunildafulton]

A forex trading chart is a graphical representation of the prices of the currencies traded in the Forex market. The prices are usually represented by candlesticks, bars, or lines. It is difficult for beginners to grasp the difference between the bar, line, and candlestick charts. However, by reading and practicing the meaning of these indicators, traders can learn the basic methods of using them in the Forex market.

 

[somrat4030]

A forex trading chart is a graphical representation of the prices of the currencies traded in the Forex market. The prices are usually represented by candlesticks, bars, or lines. It is difficult for beginners to grasp the difference between the bar, line, and candlestick charts. However, by reading and practicing the meaning of these indicators, traders can learn the basic methods of using them in the Forex market.

Forex trading chart understand is most important in trading

 

[louisegoodman]

To be successful in trading it is very important that a trader knows to read the forex charts. That doesn't mean that he needs to learn all the charts but yes at least 2 charts so that he can cross check and anticipate the movement of price more logically.

 

[Accretion]

A forex trading chart is a graphical representation of the prices of the currencies traded in the Forex market. The prices are usually represented by candlesticks, bars, or lines. It is difficult for beginners to grasp the difference between the bar, line, and candlestick charts. However, by reading and practicing the meaning of these indicators, traders can learn the basic methods of using them in the Forex market.

That’s right, new traders will have to study trading chart patterns in order to understand their meaning. There are several websites and videos available online where experts explain different types of charts and what they indicate about the market.

 

[Parabola]

Understanding a trading chart can give you a decent picture of the price movements in a specific currency pair. But, it is not that easy to understand it, especially for newcomers because they are most certainly not aware of the background and the factors that led to the formation of the chart, which they currently see on the trading platform.

 

[MarnieLarge]

@brendalloyd I totally agree! Even if reading charts is a tedious job to do, they are very effective. These charts are more precise and objective that do not have emotional factors involved.

 

[Hogwash]

Reading a forex chart is difficult for beginners. But as they come to know about the details, it becomes a lot clearer to read the charts. This post will help beginners learn about the concepts of forex chart reading.

 

[peter9461]

once you get used to reading chart, you should also start learning on major candle sticks patterns. They are very useful to know so you can spot trading opportunities and make profits.