Partner code
vnd
for assistance

How to read charts in forex? Main chart types

When investing in Forex as well as investing in any financial product, traders will have options to analyze and predict the market. What we will learn today – How to read charts in Forex? Learn Forex Trading will help investors understand the concept of charts and the information surrounding them.

Overview of Chart Forex trading

Forex charts are an important tool that traders use to analyze the currency markets. They provide price and volume data, helping traders identify trends, patterns, and trading opportunities. 

Concept How to read charts in Forex?

How to read charts in Forex? Simply put, a chart or graph. It is a visual tool for market analysis. It displays the price line, price fluctuations, and price parameters over some time.

How to read charts in Forex? It's a form of chart
How to read charts in Forex? It’s a form of chart

Therefore, the chart is an accurate representation of the price graphically. Investors can view charts on many different time frames. What is the most important thing about the chart? Not only the current price is displayed but also the past price history. From there, it can provide investors with important data as a basis for trading.

See more: Successful what is forex exchange trading?

The importance of How to read charts in Forex?

Charts are a powerful data visualization tool that can be used in a variety of fields. They can help us understand data more easily and make more informed decisions. Specifically, the Chart has the following importance:

  • Compare data: Histograms can be used to compare different values ​​in a data set. For example, you can use a chart to compare sales of different products or compare the performance of different employees.
  • Find patterns: Histograms can be used to find patterns in data. For example, you can use charts to determine whether your stock price is following a particular pattern.
  • Determine minimum and maximum values: Histograms can be used to determine minimum and maximum values ​​in data. For example, you can use a chart to determine the lowest and highest price of a stock within a day.
  • Determining average values: Histograms can be used to identify average values ​​in data. For example, you can use a chart to determine the average sales of a product in a month.

Functions of charts How to read charts in Forex?

To better understand How to read charts in Forex, we will look at its main functions. Any chart will have the following main functions:

  • Show price details: The chart will allow users to see the price of the product in a specific time frame. Important prices include open price – close price, high price – low price, and current real-time price.
  • Provides investors with useful market analysis tools: For example, Moving Average MA or RSI. These tools always come with diagrams. They will help investors get the best signals to decide on transactions.
  • You can customize and drill down to important content: Important parameters and metrics can be easily customized for review. Users can perform many operations on the chart. For example, adjust time units, display important indicators… Or draw trend lines, support, and resistance lines on the chart.
  • Choose to view specific time frames: Like any chart, investors can view it in many different time frames. For example 1 minute, 5 minutes, 15 minutes, 1 day, 1 week, or 1 month.
  • Charts have many different functions
    Charts have many different functions

Popular types of forex Charts charts

To help investors better understand How to read charts in Forex. We will specifically analyze each of the most popular chart types today. Through the chart, traders will understand the rise and fall of prices. At the same time, compare with past data and evaluate future trends. There are 3 important common chart types in Forex:

Line Chart forex

Line Chart Forex is a type of chart that displays data as a continuous line. It is the simplest type of chart and is commonly used to display time data. Such as stock price or sales. 

In the Forex market, a line chart is understood as a line connecting closing prices in a specifLearn Forex Trading time frame. Line charts are considered the simplest type of chart. Because they display closing prices based on each different trading time frame of the market.

Bar Chart Forex

The second main Forex chart is the bar chart. As the name suggests, bar charts use bars to display opening and closing prices. As well as the highest and lowest levels of a currency pair. Unlike line charts, this type of chart allows traders to understand price action over a specific time.

Because each bar represents the price range and behavior over a specific time. Bands may vary in size. Also, it’s important to remember that each bar depends on the time you’re testing. It can represent a day, a week, or an hour.

Japanese Candlestick Chart (Candlestick Chart forex)

Japanese candlestick charts are another type of chart commonly used by Forex traders. And is a slight variation of the bar chart. Candlestick charts provide a more visual representation of the price movements of a currency pair. They are very useful for traders who are new to chart analysis. Charts are also useful in identifying trend reversals to determine market direction.

Japanese candlestick charts are one of the most popular chart types
Japanese candlestick charts are one of the most popular chart types

Each candlestick displays four different prices for an asset over a specific time. The top and bottom points of the candle represent the highest and lowest price of an asset. And the midpoint and endpoint represent the opening and closing prices. The larger blocks or bodies within each candlestick help indicate how bullish or bearish an asset is.

Which chart type should you choose when trading Forex Charts?

The best chart type for Forex trading depends on each trader’s preferences and trading strategy. Here are some factors to consider when choosing a chart type:

  • Timeframe: Trend traders often use line or bar charts on long timeframes, such as the D1 chart or the W1 chart. 
  • Trading Strategy: Traders using technical indicators often use line or bar charts. Traders who use price action analysis often use candlestick charts.
  • Personal preference: Some traders prefer the simplicity of line charts. While others prefer the detail of bar charts or candlestick charts.

See more: Instructions for registering an Exness account

Notes when using charts How to read charts in Forex?

Above Self-study Forex has shared very carefully the concept of How to read charts in Forex. In this section, we will show you what to keep in mind when using it.

  • Carefully observe, identify, and evaluate the level of risk inherent in currency pairs.
  • Investors need to understand the position and the commissions paid on each trade as they can increase or decrease.
  • If you want to get involved, start small. Then make larger investments once you are more familiar and knowledgeable.
  • Use stop-loss orders to manage your money effectively.
  • Note when using Forex charts
    Note when using Forex charts

In addition, you can also learn more about what is scalping and what is XAUUSD to serve the trading process on the chart.

Epilogue

In short, How to read charts in forex? It is a form of a chart that helps you monitor market price changes. At the same time, it helps you determine current market conditions. In addition, Chart charts help predict changes that may occur in the future and tell you when investing will be profitable. Hopefully, the article shared by Learn Forex Trading has helped you learn more information about Chart charts.

Frequently asked questions?

Concept How to read charts in Forex in Forex?

Chart is a term referring to charts and graphs. Through this chart, you can analyze the market and know when to invest.

What types of charts are there for Forex charts?

There are 3 most popular and most used charts. These are line charts, bar charts, and Japanese candlestick charts.

On which platforms can I view the chart?

Most platforms that the exchange allows to use can view charts. Among them, MT4 and MT5 are the most popular platforms used to view charts as well as trade forex.

Enter partner code
vnd
for assistance

Let's discuss

Get Ebook-EA

Ebook

Instructions for receiving Ebook-EA documents: Here