It is well known to everyone that the foreign exchange market or the forex market is the largest financial market in the world. The financial traders want to trade in this complex market because of its volatility and regular turnover (more than 5 trillion dollar per day). People assume this trading platform to be a shortcut to earning more money. This is the reason that everyday more and more people are engaging in the forex trading.
There is no denying the fact that the foreign exchange market is extremely volatile, and by trading in this market strategically you can make profits of huge amounts of money. But before opening a forex trading account, you need to have a clear concept about the market and different tools that are used in trading. Among the many important tools, one of the most important are forex charts. These forex charts help the trader to do technical analysis with ease. As a trader, you can take the right trading decision in real time with the help of these trading charts. You will also be upgraded with the latest market movements with this real time trading tool. Almost all traders know that in order to trade forex, you need to know how to do technical analysis since this will help you to know the latest trends in forex trading. Not only that, they will also help you to take the right buying and selling decisions. Different forex charts are used for different currency pairs. So you need to choose a forex chart depending on which currency pairs you are trading with. A few charts are discussed below that are popularly used in forex trading. Information’s taken from the Corner Trader.
In order to know the highs and lows and the opening and closing prices of a currency, you can use bar charts. These types of charts are a little complex to use. The top vertical bar of this chart shows the highest paid for a particular time period while the lowest traded prices are shown by the bottom vertical bar. The trading range of the whole currency pair is indicated by the vertical bar. On the left side of the bar chart there is horizontal hash which indicates the opening price and on the right side, the horizontal hash indicates the closing price.
These types of charts are similar to the bar charts except the one difference that is the price direction information. In terms of candlestick charts, price direction information is given. Two major parts of this chart is the body and the shadows that are included in it. In the body of the candlestick charts, you can find the opening and the closing price.
Tick charts help you to know the unit price changes. At the bottom of the chart you can find the ask price and at the top there is the bid price. You can use this chart to take decisions as to when to enter the market.
So, before opening a forex trading account and before signing up with a broker, make sure that you are well aware of these trading charts.