To study the currency pair moves, advanced knowledge of the FX charts is a must because without reading the graph properly, we cannot set out goals accordingly. Understanding the current price behavior using the charts help even a newbie to make his first move to the Forex market.
Charts are the visual representation of the currency pairs based on a certain time-frame, and utilizing these tools, we can visualize the business activities of a single trading duration, which can be ranged from 10 minutes to hours or even a week. A chart is formed with the pricing data and financial assets over a period, and analyzing the charts, investors can strengthen their trading goal.
Price change indicates a series of random events, and using a graph, businessmen can assess the probability of managing the risk. Figures are developed focusing on user-friendliness, and using this, the research work of the pricing movement becomes so easier. With a comprehensive chart, experts can analyze the market tendencies, patterns, and movements realistically.
Method of reading a chart
In the trading figure X-axis represents the time-frame, and Y-axis expresses the price scale. Y-axis includes the vertical lines, and X-axis includes the horizontal lines. The price movement is plotted from left to right in the X-axis. Surprisingly in the old days' graphs were drawn manually by hands and it would be really so tough if the computer was not invented.
A price chart represents the divergence of the demand and supply by aggregating data of per buy or sell transaction of a certain financial instrument. A perfect chart also finds out important news regarding economic ups and downs and provides to the businessmen as news feeds so that they can make an important decision in the current trend. Graph blends the activities of the participants in the market, whether those can be performed by human beings or by robots.
Types of charts
There are mainly three types of charts, and those are the Line chart, Bar chart, and the Candlestick chart. We describe them one by one in the following description.
1. Line chart
When a figure shows us a simple line from one closing point to the next closing price point, then we can realize that this is a line chart. Using a line chart, we can see the general price movement, which is strung together in a line over a certain time-frame. Using this tool, analyzing the currency pairs becomes as tougher as it does not provide the information in detail. All we can know that the price is closed after a specific period without getting the clue when it actually occurred. Many professional traders use this chart to analyze the price of commodities within a short time. But it mostly used of the basic screening of the market.
2. Bar chart
No, you will not find this figure in a bar and enjoy a glass of beer; rather, this graph works with a bit of complex functionality by showing the opening or closing price movements based on lows or highs. Businessmen can see the price range of each time-frame utilizing the information on the bar chart.
3. Candlesticks chart
An upgraded version of the bar chart is called the candlestick chart, which has brought some outstanding variation as a bar chart to show some pricing information in a prettier graphic format. Newbies like to read this chart because this is not only beautiful but also very easy to read. Candlestick bar also helps to see the highs and lows based on the vertical lines. Bullish and bearish trend can be visualized in the platform using different colors.
Forex Charts help as the problem solver tools by providing huge market research facilities and indicators. Without taking their help, it would be really difficult for the experts to fight skillfully in this huge trading platform.
