Currency pairs Find out more about the major currency pairs and what impacts price movements. Commodities Our guide explores the most traded commodities worldwide and how to start trading them. Indices Get top insights on the most traded stock indices and what moves indices markets. Cryptocurrencies Find out more about top cryptocurrencies to trade and how to get started.
P: R: F: European Council Meeting. Company Authors Contact. Long Short. Oil - US Crude. Wall Street. More View more. Charts Follow our trading charts for the latest price data across forex and other major financial assets. Euro - Dollar Chart. How to Use Trading Charts for Effective Analysis Our trading charts provide a complete picture of live currency, stocks and commodities price movements and underpin successful technical analysis.
Free Trading Guide. Get My Guide. Top Trade Opportunities In Q2 of Real Time News. DailyFX May 28, Follow. Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features.
Trading forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Confidence in the world of trading is a big part of achieving success. Which technical levels are you on the lookout for and how do you think they will develop in the second quarter?
May 28, Follow. Forex stock market professional trader sitting at desk with laptop while buying and selling trading options. Forex stock market trading agency professional agent with neck pain sitting at desk in office workspace after a long day of work. Hedge fund company trader using laptop to predict forex stock market trend and to analyze real time financial data.
Hedge fund trader talking on phone call about forex trade profit, helping with business and economy growth. Stressful day at the office. Stockbroker in shirt is working in a monitoring room with display screens. Business man investment trading do this deal on a stock exchange. Illustration image of virtual hologram price graph and indicator, red and green candlestick chart stock trading.
Financial stock market graph on stock market investment trading, bullish point, bearish point. Businessman in hand hold banking business finance graph and invest in stock market investment pointeconomic growth and investor conceptanalysis virtual stock market chartanalyze by use technology.
Abstract background of futuristic technology blue arrow economy up stock market graph. Economic business growth on global business network social networking service online digital marketing and data analysis of financial. Company Projects Flaticon Free customizable icons. Storyset for Figma Illustrations for your Figma projects.
And since we are talking about forex charts, it goes without saying that the underlying financial instrument is a currency pair, as seen on the example see picture 1. Unlike line charts, a bar forex chart shows both highs and lows, in addition to opening and closing prices. The top of the bar represents the highest price of a currency pair that was reached, while the bottom of the vertical bar stands for the lowest price that was recorded during the period.
The actual vertical bar stands for the overall trading range of a currency pair. The horizontal hashes on the sides of a bar also have a meaning of their own. The opening price is the hash on the left and the one on the right signifies the closing price, so all there is left is to identify any forex chart patterns. Picture 2. Remember, every single bar on the chart stands for a collection of data and has a meaning of its own. In fact, every element of a forex chart has a meaning, whether we are talking about currency charts, live forex charts or any type of chart that can be used in forex charts analysis.
Every bar in this type of forex chart, for instance, tells you the open, high, low and close for a currency in a certain time period. This is why this forex chart is also abbreviated to OHLC. The initial letters for the type of data it provides and any forex chart patterns that might emerge come from these. Finally, the most commonly used type of forex chart — the candlestick forex chart.
Essentially, these give you all the information you can find in a bar forex chart, only it comes in a package that is more visually appealing and easier to interpret. This also meant forex charts analysis is easier with this type of chart. The difference between the high and low price is still indicated with the length of the bar on a candlestick.
The exception and the main difference is that the middle of the candlestick is used to indicate whether the currency pair closed higher or lower than it opened. This way of representing data in currency charts takes one part of the equation right off the bat, as a trader can deduce the direction of a price shift before even gauging the high and low prices, saving time and making forex charts analysis that much quicker.
Full bars mean the closing price is higher than the opening one and hollow bars indicate that the closing price is lower than the opening one. However, many candlestick forex charts — especially live forex charts — are colored, like the example in picture 3. In most live forex charts — and forex charts in general — there are different color options, usually chosen by the owner of the platform where they are available. As for colored forex charts, green means filled and red stands for hollow.
It should be said that bar forex charts also employ a similar principle in order to facilitate easier forex charts analysis, although they still seem to be losing to candlestick charts in terms of popularity. When analyzing currency charts, speed and reliability is everything; you need to grasp a general situation quickly, especially when dealing with live forex charts.
The beauty of candlestick charts is that you can gauge the overall trend without even looking at the actual price action. Just by looking at the color of the bars, you can gauge the general direction of a trend, provided there is one to be gauged in the first place.
The more green you see, the stronger the upward trend of the currency pair in question. Consecutively, the more red you see, the stronger the downward trend. Even the possible reversal points are easier to identify, and at a mere glance, too. However, things are actually more complex than that, and the list of advantages of forex charts does not end here. There is a reason why live forex charts have become irreplaceable in modern forex charts analysis.
Most of these forex charts are straightforward and easy to interpret. Too easy, some would say, as traders are becoming too dependent on what the charts are telling them and neglecting other types of analysis. In any case, forex charts are easy to interpret, but hard to predict.
They can help traders determine crucial moments and identify trends. They also serve as a visual aid, summing up copious amounts of data into a nice, compact package that is easy to interpret and use. The best part is that most of these charts are made automatically and are available on almost any trading platform.
The only real downside is picking the right one and interpreting it properly. The interpretation part will receive due attention in a little while, but it is far more important to make sure the forex charts being used are legitimate; otherwise, the forex chart patterns will not be accurate and the forex charts analysis will not be reliable. The fact is that most of forex trading is done online, so the majority of currency charts must also be available online. This brings a whole new dimension, as not all brokers — or live forex charts they offer — are legitimate.
Of course, most frauds get discovered relatively early on, but this is of little comfort to those they swindled. In order not to fall prey to these frauds, it is imperative to know where and how to get the right forex charts. Or, should I say, which forex charts to choose. Most brokers employ platforms with some level of charting options, so creating, analyzing and interpreting charts should not be that much of an issue, as long as the data feed is legitimate.
A good advice would be to try out charting packages and find the one that suits your purposes the best. Other than that, most reviews on forex brokers also deal with the quality of charts they offer, among other things.
Of course, there are sites that offer free forex charts, or they can at least offer you a deal: sites such as DailyFX or Investing. But the main part is not getting your hands on a forex chart. Actually, it is the forex charts analysis that need concern you the most.
Analyzing currency charts is just as important as getting the right tools for the job. After all, no accurate forex charts analysis can be done if the forex chart patterns are inaccurate. Also, having the best and clearest forex chart patterns is useless to someone who does not know how to make use of them. In essence, there is no single, foolproof way of analyzing currency charts.
Some forex traders focus on the fundamental approach, trying to incorporate currency charts into their own prognosis, based on factors such as interest rates, employment, inflation, political situation and the overall state of the economy, which can greatly affect the value of a currency — either in a positive or a negative fashion.
The main sources of information for such traders would be news outlets and various texts by analysts from around the world, while currency charts would primarily serve to prove their suspicions or refute them entirely.
On the other hand, a technical forex trader would rely heavily on live forex charts and combine them with various technical indicators in order to predict future price action. To whatever extent possible given the circumstances! Either way, the actual price is dictated by supply and demand, and the only way to gauge it is via live forex charts, so learning to interpret them is definitely a priority.
Regardless of which broker provides the actual service, the first thing to do is — you guessed it, to open the chart. In order to do that, one would have to specify the currency pair, the data range as well as the period for which the chart would be updated.
The data range determines the overall amount of data you require. The longer the range you choose, the more data the chart will contain. Naturally, if your strategy involves frequent trading and not holding on to your positions for an extended period of time, it would serve little purpose to analyze the data from five years ago. Also, long-term trades should not be based on five-minute period currency charts.
Once again, it all depends on the trader and his or her strategy. Regardless of what type of trader you are, the most commonly used type of forex chart is the candlestick forex chart, so learning to read these can be considered a priority.
Experienced traders can gauge price action off a candlestick chart in a single glance, although beginners should probably pay more attention than that. In any case, the basics of interpreting these charts as well as their elements have already been covered, so it makes little sense to repeat it.
What has not been covered, however, is adding indicators onto existing charts. These are the favorite tools of technical traders, and most brokers have a selection of indicators which are already available to their clients right off the bat, with hundreds more available for downloading on the internet.
The final part is to identify a trend and to draw the corresponding trend line. It shows the opening and closing prices, as well as the highs and lows. The bottom of the vertical bar indicates the lowest traded price for that time period, while the top of the bar indicates the highest price paid.
As the price fluctuations become increasingly volatile, the bars become larger. As the price fluctuations become quieter, the bars become smaller. The fluctuation in bar size is because of the way each bar is constructed. The vertical height of the bar reflects the range between the high and the low price of the bar period.
The horizontal hash on the left side of the bar is the opening price, and the horizontal hash on the right side is the closing price. A bar is simply one segment of time, whether it is one day, one week, or one hour. Open : The little horizontal line on the left is the opening price.
Low : The bottom of the vertical line defines the lowest price of the time period. Candlestick charts show the same price information as a bar chart but in a prettier, graphic format. However, in candlestick charting, the larger block or body in the middle indicates the range between the opening and closing prices. Traditionally, if the block in the middle is filled or colored in, then the currency pair closed LOWER than it opened. Here at BabyPips. They just look so unappealing. A color television is much better than a black and white television, so why not splash some color on those candlestick charts?
We simply substituted green instead of white, and red instead of black. This means that if the price closed higher than it opened, the candlestick would be green. For now, just remember that on forex charts, we use red and green candlesticks instead of black and white and we will be using these colors from now on. The purpose of candlestick charting is strictly to serve as a visual aid since the exact same information appears on an OHLC bar chart.
There are many different types of charts available, and one is not necessarily better than the other. The data may be the same to create the chart but the way that data is presented and interpreted will vary. Each chart will have its own advantages and disadvantages. You can choose any type or use multiple types of charts for technical analysis.
It all depends on your personal preference. Because it is easy to believe in a trade that conforms to conventional wisdom.