• How To Read Forex Charts

    GBP USD analysis

    It is known that the Forex market is responsible for helping to promote the comparison of different world currencies with each other and of course also with the art of trading.
    When you start trading in the largest forex market in the world you may feel a little discouraged because of the fact that you are new in the business.
    Normally the brokers bring with them some additional support tools that give to you as a trader the necessary help to start.
    Also, each one of the operators will be assigned a tool that will simply surpass them all, and we talk about live currency tables and currency charts.
    Unquestionably, forex charts are usually spectacular to help traders analyze what is happening in the market. With these graphics you will be provided with ideas and special clues about future events that could happen to traders, but only if they can understand them in the right way.

    Having access to Forex charts

    To understand the graphics in the Forex market you must have access to them, there is no other way to do it.
    The way in which you see them is vital at the moment that you are going to take commercial decisions, through them you are able to see all the buying and selling activity that is carried out in the market.
    The platform that we recommend the most is the MetaTrader platform, this platform is one of the primary and most used Forex trading platforms.
    The next platform offers different graphics for free in case you don`t have enough money yet:
    -MetaTrader 4
    -MetaTrader 5
    -MetaTrader WebTrader
    Usually, most Forex traders start using MetaTrader 4, there they can be downloaded for free in order to view Forex charts. This also brings a great advantage: that it can be operated directly from the graph being viewed.

    Different types of charts and how to understand them

    Line charts: This is the most common chart and it is the most responsible for connecting the closing prices of the time period that you are viewing. If you focus on analyzing the daily chart, you will be able to see that the line connects the closing price of each trading day.
    As I said earlier, this is the most basic type of chart and is also used by most operators when they are a newbie. It usually has as its main use to identify image trends that are usually larger, however, it does not offer much more unlike some of the other types of graphics.
    • OHLC Bar Charts:
    This other type of chart is the one that shows a bar for each period of time.
    If you look at a daily chart, each vertical bar that appears will represent the value of a trading day. When talking about this type of graphics, you see a script on the left which represents the opening price and on the right is another script that represents the closing price.
    When the bar is at its maximum it will represent the highest price that the market traded during that time that it was previously selected.
    The minimum bar is the lowest price that the market traded during the selected period of time.
    The colors can also be distinguished, if we speak for example of the green bars which are known as buyer bars, they are the ones that indicate the closing price that will be above the opening price.
    On the other hand, red bars are known as supplier bars since the closing price is below the opening price.
    • Candlestick charts: They share similarities with OHLC bars which also provide open values, highs and lows, in addition to the closing of a specific period of time. The difference is found in that its table between the values of the opening and closing prices is different.
    Generally, they provide a variety of price action patterns which are used by merchants around the world.
    When you understand the price and the time axis you will have support to determine all the things that have happened in addition to what could happen, this is the reason why learning is the key for the success in the Forex market.

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    Discussion

    1. Jack Beale

      It is funny because I struggled with the Candlestick charts even though they are very similar to OHLC bars. I think I was just making it more complex and complicated than it actually is. Very helpful post here, going to save it for future reference. I agree as well about being successful in Forex trading, you need to learn all there is to learn to really make it.

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