Quick introduction to forex chart types and how to read them. It’s no secret that Forex trading is able to be performed better when you learn Forex from the basics properly. When it comes to the basic of foreign exchange, we shouldn’t miss about the Forex chart. Forex charts are surely one of the most important elements in the Forex market since it can be one of the resources to help traders on making trading decision.

The 3 Popular Types of Forex Charts 

If you are wondering what Forex chart is all about, currency chart is actually one resource that provides visual display of the worth of certain currency against the other assets. In the Forex market, there are actually three popular Forex charts such as line chart, candlestick chart and bar chart. Now, let’s learn more about each of the type in this following information.

#1 Line Charts

When it comes to line charts, it connects a sequence of data points with a simple line. This type of line is usually employed by traders to keep an eye on closing prices. This is because the line draws from one closing price to the upcoming closing price. When it comes together on the chart, general price movement of particular currency pair will be seen.

#2 Bar Charts

Bar chart is a bit more complicated since it displays opening as well as closing prices and the highs as well as the lows. The vertical bar’s bottom specifies the lowest trade quote for a period of time while the top signifies the highest price disbursed. The horizontal hash available on the left displays opening price with closing price displayed on the right.

#3 Candlesticks Charts

When it comes to candlesticks chart, we can say that this chart display similar information to the bar chart, but in more attractive, graphic format. Candlestick bars on the chart still refer to the high-to-low series with a vertical line. On the other hand, in this chart, there is a bigger block in the middle which indicates the range between opening price and closing price. 

Generally, if the block or body in the middle is colored or filled in, it means that the currency pair closed subordinate than it opened. When the traditional chart may come in black and white, it is possible that you find candlestick chart which is shown in colorful manner. Different Forex chart providers may have different way, so you need to check it first.

The Basis Steps to Read Forex Charts

Now that you have learned a few types of Forex charts, you can continue to learn some basic steps to utilize this tool in trading Forex. For sure, you need to make sure that the currency charts you take are provided by a legitimate provider. You can simply use the one provided by your brokerage company. After that, set a specific time frame to continue.

Next, you need to observe your currency chart depending on the time frame you have set. At this point, you will be able to see a line graph which stands for the change in value of currency over the period of time. You can go over several chart structures to help you such as some types that have been discussed above. Understand each of them.

Conclusion

Those are a few popular types of Forex charts along with some of the basic steps to read Forex charts. Different charts will have their own unique way to read and understand them. Consider learning more about each Forex chart and the strategies to read and utilize it for your advantage. Finally, don’t forget to upgrade yourself and learn Forex continuously to maximize your profit!