| A chart showing the movement of a forex pair is a | | | | forex-related websites. These types of charts are ok |
| very basic tool in the forex trader's arsenal. The | | | | if you only need a quick glance to determine the |
| chart is simply a graphical story of what a particular | | | | trend. However, if you are a more serious trader, |
| forex pair has been doing over a certain time period. | | | | you will need charts you can access immediately |
| It can be over the last 10 years or the last 10 mins. | | | | without the need to access a website. Generally, |
| Being able to read and understand a chart effectively | | | | forex software can provide this for you. If this is for |
| is a skill all forex traders must develop if they expect | | | | you, you will need to have a good broadband |
| to be successful. | | | | connection to ensure you are always connected |
| Every forex chart will have the forex pair it depicts | | | | online. |
| on it, whether it's EUR/USD, USD/CHF, etc. For | | | | Another reason for forex software is because there |
| example, a CHF/USD chart will give you an idea of | | | | are dozens of forex pairs. This means that it is too |
| how the Swiss Franc and the US dollar are doing | | | | difficult to keep track of mentally, no matter how |
| relative to each other. | | | | good your memory is! Good forex software will |
| Along the bottom of the chart (the X-axis) will be | | | | present a lot of information on their charts and you |
| the timeline. The period may be 15 mins, a day, a | | | | can modify it to suit your needs. You can also track |
| week, or even a month. The time period can be | | | | multiple charts as well and save them as your |
| chosen by the trader. There are incremental amounts | | | | 'favorites'. It is a good idea to save other charts as |
| on the left-hand side (Y-axis) which depict the value | | | | your favorites and occasionally glance at them. The |
| increments of the pair. For example, a EUR/USD | | | | reason for this is you never know when a good |
| chart may show 1.2541 at the bottom and 1.2571 at | | | | trading opportunity will present itself! |
| the top. The middle of the chart is where all the | | | | Viewing trends on a chart is only one advantage for |
| action is! It tells you what is happening right now. A | | | | being able to read a chart. Some forex pairs will act a |
| forex OHLC chart will be a series of "ticks" and each | | | | certain way before a major move. Not only can this |
| "tick" will represent a certain time period (ie 15 mins, | | | | provide you with a fantastic trading opportunity to |
| an hour, a day, etc) Generally, each tick will show | | | | get in place before the move takes place, but you |
| four important pieces of information. It will show the | | | | may even be able to predict how far the currency |
| pair's "opening" price (a horizontal line pointing to the | | | | pair will move. Although it is too in depth for this |
| left), a vertical line connecting the highest point in the | | | | article, certain forex pairs will only move a certain |
| time period and lowest point in the time period, and | | | | amount before stopping and maybe changing |
| the closing price for the time period (a line pointing to | | | | direction. All of this can be read by a forex chart. |
| the right). Successful traders may be interested to | | | | Imagine being able to look at a chart and know that |
| know when a currency pair is closing at a higher price | | | | a certain pair will not only move very rapidly in one |
| than its opening price, or maybe when the opening | | | | direction very soon, but also knowing how far it will |
| price and closing price are very similar for a certain | | | | probably go. You'd not only be able to get in before |
| time period. | | | | the move begins, but you'd also be able to get out |
| The reason why the forex chart is so useful is that it | | | | before the move stops. Hello mega profits! |
| graphically depicts how a currency pair is going. It is | | | | Being able to read a forex chart has numerous |
| easy to be able to look at a chart and decide | | | | advantages, not only for the beginning trader, but |
| whether the pair is in an uptrend, a downtrend, or | | | | also experienced trader. A forex chart can show you |
| going sideways. Knowledge of the current trend is | | | | exactly what has happened in the past and can give |
| one of the most trusted techniques traders use to | | | | you a great indication of what will happen in the |
| make their trading decisions. By changing the time | | | | future. Although it is not a guarantee of success, it |
| periods, you can see if the trend is short-term, | | | | certainly stack the odds in your favour for making a |
| medium-term or long-term. | | | | successful trade. So take some time to learn as |
| Finding forex charts isn't very hard. They are all over | | | | much as you can about chart reading. Your wallet and |
| the internet on brokers' websites, forums, or other | | | | trading account will thank you for it! |