The Forex market is responsible for helping to promote the comparison of different world currencies with each other and of course also with trade.
When you start trading in the largest forex market in the world you may feel a little discouraged just by being new to the field.
Usually the brokers bring with them some additional support tools that will serve as support for the trader.
On the other hand it is also well known that each of the operators will be assigned a tool that will simply surpass them all, and we talk about live currency tables and currency charts.
Undoubtedly, forex charts are usually spectacular to help traders analyze what is happening in the market. These graphics usually give you ideas and special clues about future events that could arise to traders, but only if they can understand them.
Now we will give you a quick look to some things you need to know in regards to reading the forex charts.
Having access to Forex charts
With the objective of being able to start reading the graphics and also understanding them, it is essential to be able to access them.
So before you can learn to read forex charts, you must first be able to access them. The way in which you see them is vital to be able to make commercial decisions, through them you are able to see all the buying and selling activity that is carried out in the market.
The MetaTrader platform is the primary and most used of all of which are used by traders in the cryptocurrency exchange market.
The next platform offer different graphics fro free:
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 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 try to read forex charts for the first time, things may seem messy and will give you a headache, this does not mean it is impossible.
Being able to understand the price and the time axis will help you determine all the things that have happened in addition to what could happen, so focusing on learning is extremely important and very useful.