The following article will give you a very basic introduction into the world of Forex charting. It is designed for people with no prior charting knowledge and also for those who would like a quick reference guide or a refresher on the basic chart types that forex use in Forex. Since reading charts is the basis of what we do here at Learn To Trade The Market, we need to start from a solid foundation and get the basics of charting out of the way. This material will give you the necessary information you will need to make sense out of all the other information on my website as well as my Forex trading course. Even if you have no previous experience or knowledge of trading the markets you have probably seen a line chart of price on the nightly news or in a text book at some point. A line chart gives you a good snapshot of market direction by connecting a line from one closing price to the next You can set them to show open, high or low prices too, but the closing price is most popular. Most traders put a greater emphasis on the understanding price of any trading instrument, so the line chart can give you a meaningful view of market movement over a period of time. Zooming out and looking at a daily or weekly line chart can give you a good idea of dominant trend direction. My Forex trading course mainly uses candlestick charts which are the most popular charts and the ones you will encounter the most. We will cover candlestick charts after bar charts below…. A bar chart shows the closing price as well as the open, high, and low price for the time period you are looking at. The top of the vertical bar indicates the highest price paid during that time period while the bottom of the bar indicates the lowest price paid during that time period. The entire length of the bar from top to bottom thus indicates the range of price over the time period you are looking trading. You will notice that each individual bar also has a hash on the left and a hash on the right side of the bar. The hash on the left side indicates the opening price during that time period, the forex on the right side indicates the closing price for that time period. A bar is simply one segment of time, whether it is one day, one week, or one hour. Here is the same chart used in the line chart explanation but in bar chart form: Candlestick charts show the charts information as a bar chart but in a graphical format that is more fun and useful to look at. Candlestick charts indicate the high and low of the given time period just as bar charts do, forex a vertical line. The main difference lies in how candlestick charts display the opening and closing price. The large block in the middle of the candlestick indicates the range between the opening and closing price. So if the real body is solid in color than the top of the real body indicates the open price and the bottom of the trading body indicates the closing price. If the real body is unfilled or usually white, the top of the real body indicates the closing price and the bottom indicates the open price. This will all become clearer with an illustration…. Here is the same chart used in the line and bar chart explanations but in candlestick chart form: By changing the color on your candlestick chart it can make it easier and more appealing to look at, red and blue are often used as alternate trading, however, I prefer black and white and you will see most charts on my website in black and white. Here we have substituted blue for the white candlestick and red for the black candlestick. In other words, blue is a bull candle meaning the close was higher than the openand red is a bear candle meaning the close was lower than the open. Candlesticks are probably the most popular of all three chart forms among traders because they are visually easier on your eyes and they allow you to more easily catch forex and trends. My forex trading course mainly uses candlesticks and I suggest all of my students use them. Ultimately it is your decision, but I feel they make learning about price action much easier and more relaxing on the eye and the brain. I find it easy to understand your explanation and am thankful for the knowledge trading you have imparted. Brilliant and clear lessons. Ive always appreciated candlesticks in price action Forex trading. Ive traded as per yo lessons and made profits. Your email address will not be published. Notify me of follow-up comments by email. Notify me of new posts by email. Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade understanding invest based solely on this information. By Viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Learn To Trade The Market Pty Ltd, it's employees, directors or fellow members. Futures, options, and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks understanding be willing to accept them in order to invest in the futures charts options markets. Don't trade with money you can't afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results. Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on understanding information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results. Forex Charts — Introduction to Forex Charting By Nial Fuller in Forex Trading Strategies 11 Comments. A brief introduction to Forex charting: Here is charts a line chart looks like: We will cover candlestick charts after bar charts below… The Bar Chart: The little horizontal line on the left is the opening price High: The top of the vertical line defines the highest price of the time period Low: The bottom of the vertical line defines the lowest price of the time period Close: The little horizontal line on the right is the closing price Here is the same chart used in the line chart explanation but in bar chart form: You may ALSO be interested charts the following lessons … Get the correct New York close Candlestick Charts here Forex Candlestick Charts Forex Japanese Candlestick Patterns Price Action Forex Trading. Related Trading Lessons The Anatomy Of How I Enter Price Action Forex Trades Introduction to Trading With Price Action Strategies. Now I want to hear from you! 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Understanding Candlestick Charts for Beginners
Understanding Candlestick Charts for Beginners
2 thoughts on “Understanding forex trading charts”
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There was, I knew, a gay student union that met regularly in one of the many red-brick-and-white-stucco neoclassical buildings on campus, undistinguished knockoffs of Jeffersonian originals.