November 14, 2017

How to read a Chart (graph) in Forex Trading

In the world of forex trading, generally when people talk about technical analysis then that first comes to mind is a graph (chart). The technician typically use graphs because it is the easiest way to visualize the data on price movements from time to time. You can take the help of a graph to determine trends and find patterns that could potentially drive you grabbed an incredible opportunity.

There are three types of chart technical analysis in forex trading, we will take apart one by one.

1. Line chart
Line chart is a graph of the simplest of which is described as a line connecting the closing prices. For example: in a few consecutive days trading closed at a price of 100, 150, 200, 250 ... then the price level is connected with a straight line. With this graph we can see the price movement in General in a given time period.
An example is like this:
Read Chart (graph) Forex Trading

2. Bar chart
Bar chart is a little more complicated than the line chart. This type of chart gives information about the opening price, closing price, highest and lowest within a certain time period. Because it has such information, this chart also called OHLC chart (Open-High-Low-Close). Here is the basic form of a bar chart:
Read Chart (graph) forex trading

The lower end of the chart it is lowest price ever traded in a period of time, while the other end of it is the highest price. Its vertical bar line represents the range (span)rates in the period. Small horizontal line on the left is the opening price while residing on the right is the price of its closure. In the example above, the opening price is lower than closing price. But the opening price may be higher than the closing price.
Example of a bar chart in the chart are as follows:
Read Chart (graph) forex trading

In simple terms we can say that one bar was a period of time, whether it's one month, one week, one day, an hour, or even a minute. Depending on the time frame of how long we plot the chart.

3. Candlestick chart
Named "candlestick" because its shape is similar to a candle. His full name is "Japanese candlestick chart", because it is said that he comes from the land of the cherry blossom. This type of chart provides exactly the same information with a bar chart, it's just "posture" of his body more "sexy".
Read Chart (graph) forex trading

Typically, the body of the candlestick chart is white and black. If his body is white then its open price is below, otherwise if the body is black then the open price is above. So, the body itself describes the distance between the price of opening with the closure in a certain time period.

If the open price below the price close, then called with a bull candle. In technical analysis, the term "bull" or "bullish" is used to describe the movement of the price rises. To describe price movements that fall, used the term "bear" or "bearish", so the candlestick that has open price above prices close called bear candle. Just use the "mnemonic" is to make it more easy to remember it: BULL, BEAR = up = down.

But if you think black and white is less "stylish", or lack of interest to you, then you can replace it with a color that you like. Other color combinations are often used for example is red for bear candle and blue for bull candle. Remember, you will spend time observing the chart, so the colors that appeal to you will help remove the saturation. That's important, you know how to distinguish between a bull candle with bear candle.
See examples of candlestick:
Read Chart (graph) forex trading

How much more interesting, isn't it? Or do you have other colors? Please Express Your "colors". Many traders prefer using a chart of this type because it is more helpful to visually recognize the price of open, close, high and low than the bar chart.
Below is an example of the display of the graph of the price movement using a candlestick chart:
Read Chart (graph) forex trading

So a discussion of how to read Chart (chart) in Forex trading. Hopefully Helpful


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