The general Forex, or foreign exchange market, helps to promote the comparison of different world currencies against each other, and against other assets, to help individual traders and investors take advantage of conditional values for those currencies. Get access to up-to-date currency chart information. In order to read and benefit from currency charts, you’ll need to get them from a legitimate provider. Most of the smaller traders and investors who profit from currency trading use charts that are offered directly from their brokerage services. Select a time frame for your currency chart. One of the most important steps in using currency charts, or any other kind of financial chart, is to set a specific time frame. The values that you view are only relevant to the specific time frames that you establish for them.
Observe your currency chart for the desired time frame. You will see a line graph that represents changes in currency value over that period of time. Look at your line graph against your Y axis. The Y axis, or horizontal axis, for a currency chart most often indicates a comparative asset price.
The X axis for your currency chart represents your time frame. You will see that both of these axes have scaled, segmented values, where your line graph fluctuates in a variable way. Advanced traders and others look for specific visuals in a currency chart to try to predict which way future prices will go. Understand candlestick charting to take advantage of this advanced financial resource. Candlestick charts show a range of traits for a specific trading day, with a top and bottom that illustrate price movement. Look for items like Fibonacci retracement.
A Fibonacci retracement is a specific kind of price spike or dip where a reversal can signify a general trend. Read up on this sort of predictive tool and apply it to your currency chart observation. Look for movement against moving averages. Moving averages tell you how the price has changed over a longer time frame. These may be helpful when you are viewing your currency chart. Understand what the chart consists of.
There are no calculations required to interpret Candlestick Charts. They are a simple visual aid representing price movements in a given time period. In much the same way as the familiar bar chart, a candle illustrates a given measure of time. The advantage of candlesticks is that they clearly denote the relationship between the opening and closing prices. Understand that candlesticks display the relationship between the open, high, low and closing prices. This means that they cannot be used to chart securities that have only closing prices. Interpretation of Candlestick Charts is based on the analysis of patterns.
Currency traders predominantly use the relationship of the highs and lows of the candlewicks over a given time period. If the line occurs after a significant uptrend, it is called a Hanging Man. A small body and a long wick identify the Hammer. The Pricing Line is a Bullish Pattern where the first candle is a long, Bear candle, followed by a long Bull candle. The Bull candle opens lower than the Bear’s low, but closes more than halfway above the middle of the Bear candle’s body. A Bullish Engulfing Line is a patter strongly Bullish if it occurs after a significant downtrend.