How to read forex chart
Trading the foreign exchange market in the world may seem difficult for a beginner trader at first. With the help of certain tools, decisions about who and when to trade begin to become much simpler. However, there is one trading tool that takes precedence over all forex charts.
Live Forex charts help traders analyze what is happening in their current market. It also provides special clues and insights about what might happen next, but only for those versed in how to read the Forex trading charts.
This article will cover everything you need to know about how to read forex charts, how to identify signals in various types of live forex trading charts, how to access and trade free forex charts and why to read candlestick charts. This is the best thing this year.
How to access live forex charts
To learn how to read forex charts, you must first have access to them. Viewing real-time forex charts is essential for making trade decisions because it shows all the buying and selling activity that is taking place in the current market. The MetaTrader platform is one of the best trading platforms used by financial market traders. Admiral Markets offers the following trading platforms, all with free forex charts.
MetaTrader Supreme Edition (custom plugins for MetaTrader 4 and MetaTrader 5 created by Admiral Markets and professional trading experts)
Most forex traders start with MetaTrader 4, which you can download for free to view free forex charts. One of the main benefits of this platform is that you can trade directly on the chart you are looking at. So, if you are versed in how to read forex trading charts and identify tradeable signals, you can easily access real-time order tickets to buy or sell.
Disclaimer: The financial product charts in this article are for illustrative purposes only and do not constitute trading advice or solicitation to trade financial products offered by Admiral Markets (CFDs, ETFs, Shares). Past performance does not necessarily indicate future performance.
The screenshot above shows the price chart of the EUR / USD currency pair on the MetaTrader platform, and you can select the currency you can trade on the left. MetaTrader shows real-time forex prices for the currency pairs you are viewing. In general, brokers take market prices from interbank markets and top-tier liquidity providers to truly connect to the global market.
So what does this free forex chart say and how do you read it? Let's explore!
How to read a trading chart
This section covers the basic elements of chart reading before moving on to advanced chart reading in the next section.
1. Price and time axis
Forex Index Chart Example
All trading charts have 'time' on the horizontal x-axis and 'price' on the vertical y-axis. In other words, you can see the past price by moving to the left of the chart. The date and time displayed depends on how you zoom in or out on the chart. The more reductions, the more historical price action is displayed.
In the forex trading chart, the vertical y-axis shows the 'exchange rate' price of the market you are looking at. With a brief understanding of price and time, you can deduce some scenarios that will help traders decide when and what to trade.
From the left side of the chart to the right side of the chart, you can infer that if the exchange rate fell, the market was down or the seller was controlling it during that period.
If the exchange rate rises from the left side of the chart to the right side of the chart, you can deduce that during that period, the market is on the rise or is being controlled by the buyer.
This may sound simple to some, but in practice it is very important. Why? Once the trend is up, it can last a long time. To calculate how much the market is going up or down, you need to look at what the exchange rate price and 'pip' are.
2. Exchange Rate Price-Pip
The movement of currency pairs is often referred to as 'pips', which represents the percentage in points. Basically, this is just a unit of measure for price fluctuations. Most currencies are measured with four decimal places. However, Japanese Yen (JPY) currency pairs are measured at two decimal places.
Due to algorithmic trading today, most platforms offer precise prices for trading robots to execute transactions within nanoseconds. That's why there are often different numbers in exchange rates. However, it can be ignored when calculating the pip movement.