What is the first step to start trading?
Before you start trading, you need to learn how to read Forex charts. This is the first step to take when you really want to be profitable. Without a good understanding of the market, you cannot take positions that will end up gaining. In this article, learn how to read two types of Forex charts. Happy reading!
Know how to read the candlestick chart
The Forex chart is used to represent the market, showing, as a function of time, how the prices of a currency pair move. The vertical axis indicates the course and the horizontal axis represents time. Thanks to trading platforms, it is possible to easily trace all markets preferably in a few clicks. For more information,check here Indeed, candlestick charts make it possible to take very precise positions, to know when to enter or leave the market. However, they indicate the profitable information on price developments, in the form of candles, in thin and long bars, in red or green colour. Each bar, red or green, indicates the evolution of prices over a given period. The green candle indicates the increase in the price of the currency pair over a chosen period. For example, by choosing a one-day period, the green candle will indicate the increase in the price of the currency pair over the one-day period and its closing at the highest price. The red candle, on the other hand, indicates the decline in the price of the currency pair. Thus, it should be noted that each candle has four prices of the currency pair. These are opening, closing, rising and falling. The opening indicates the price at the beginning of the chosen period, the closing indicates the price at the end of the period.
Line chart, very useful for beginners
The line chart shows only the closing price for the chosen period. It connects the closing prices, forming a line through consecutive points. This graph, by this simple means, displays the information of the courses, without giving indications on the opening price. It is more used by traders who trade long-term trends.