When trading in the foreign exchange market you are required to keep up to date with the latest forex news announcements. This is important as any global happenings can influence the market movements in a catastrophic manner. Furthermore, the global forex news can also impact on the forex rates of the particular currency pairings you are trading.
In order to understand the different trends that affect the forex market you must conduct a degree of technical and/or fundamental analysis. Forex charts are excellent means to obtain a visual representation of the alterations in the forex rates of your currency pairing. It is also a highly efficient means of viewing both current and historical forex market trends.
The availability of different forex charts
Nowadays, almost all aspects related to the forex market can be located online. The internet is potentially the most effective means of locating forex charts with several websites being highly recommended for this service. However, one may not need to search for charts if you are using trading platforms which have this tool as an integrated feature.
The most efficient forex charts are those which do not have an abundance of data shown on them. You should seek out forex charts that provide the information you require for profitable trades instead of the ones that detail all market trends. Remember, a forex chart is like a trading strategy in that the choice of which to use is based on personal preference.
The forex line chart pattern
The forex line charts is potentially the most well-known and simplest of the forex chart. It illustrates the overall market trend of a chosen currency pairing over a specific length of time. The currency value is plotted on the chart over a time period and is connected via lines. The line chart is ideal if you are looking to check trends within a particular currency.
The forex bar chart pattern
The forex bar chart is not as well-known as the line chart but offers a great deal more information than the line. The bar chart indicates trends as well as indicating the opening and closing prices of the particular currency for a specific time period. It is most effective in that it offers insight into foreign currencies and foreign currency trend predictions. Unfortunately, it is very confusing to the new trader due to the complexity of its representations.
The forex point and figure graph patterns
The point and figure graph patterns are one of the more regularly used options; however are not as easily read as the line chart. The point and figure graph utilises symbols instead of bars and lines with the most common symbols being X and O. These symbols represent an increase or decrease in the currency prices.
The forex candlestick graph pattern
The candlestick graph pattern is used by many traders in the forex and financial markets. It is very similar to a bar graph and uses different colours to illustrate different levels of information. A red fill of the ‘candle’ indicates a currency closing price if the closing price is lower than its opening price. The green colours represent a closing price which is higher than the original opening price. Finally, a lack of colour represents no difference between the closing or opening prices.
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