Introduction:- Basic of Forex Trading. Forex trading, also known as currency trading, involves buying and selling currencies in the foreign exchange market. The forex market is the largest financial market in the world, with a daily turnover of over $6 trillion, and is open 24 hours a day, five days a week. The basic principle of forex trading is to speculate on the future direction of a currency's exchange rate. For example, if you believe that the value of the US dollar will rise against the euro, you would buy US dollars and sell euros. If the exchange rate does indeed move in your favor, you can sell the US dollars back for euros at a higher rate and make a profit. One of the key factors that affect the value of a currency is the economic health of the country that issues it. A strong economy is usually associated with a strong currency, while a weak economy is associated with a weak currency. Therefore, forex traders need to keep up to date with economic news and events, su...
What Is the Best Chart for Forex?
"Please tell me the basic view of the Forex chart!" "How should I draw the line?" Many people may have questions like this.
If you can understand how to read Forex charts, basic church patterns, technical analysis, fundamentals analysis, etc., even beginners of Forex will be able to make a profit.
Therefore, in this article, we will explain in detail the types and views of Forex charts, typical examples of chart patterns, and Forex companies that make it easy to see Forex charts.
Therefore, in this article, we will explain in detail the types and views of Forex charts, typical examples of chart patterns, and Forex companies that make it easy to see Forex charts.
What is an FX chart? Why you should look at the chart
The FX chart is a graph of past exchange rate movements and is used to predict future exchange rates. In particular, FX charts are indispensable for technical analysis and can be widely applied from short-term trading to medium- to long-term trading.
Investors all over the world all look at the same chart to make buying and selling decisions, so sometimes a large number of buy or sell orders are concentrated and fluctuate greatly.
In this way, the Forex chart seems to move randomly at first glance, but the price changes while the forces of "buy" and "sell" compete with each other.
3 Types of FX charts
Candlestick Chart
The candlestick chart was actually invented by Japanese Munehisa Honma during the Edo period and is a common recognition among people all over the world. It is designed so that you can see the current market situation at a glance by arranging candlesticks one by one, and it is the most informative chart among the three types of charts.
Line chart
The line chart is the simplest chart that connects the closing prices for each hour. In addition, since hidden lines, positive lines, whiskers, etc. are not displayed, there is an advantage that you can trade without being confused by unnecessary price movements.
Bar chart
The bar chart is a simple chart with bar charts showing price movements and is often used by investors in the United States and Europe . "4 prices" has the characteristic that if the closing price is higher than the opening price, it becomes a "positive line", and if the closing price is cheaper, it becomes a "hidden line". , Only the low price is displayed.
Especially in Europe, there is a culture that emphasizes the closing price, so there are many cases where the "three prices" of the bar chart are used.
Basic knowledge to remember from the perspective of Forex charts
Uptrend
An uptrend is when the market as a whole is on the rise. Exchange rates tend to be above the moving averages. The continuous wave of mountains and valleys is gradually rising, and when the low and high prices are connected, the chart will be in a state of rising to the right.
Downtrend
A downtrend is the opposite of an uptrend, with the entire market declining. In many cases, the exchange rate is below the moving average line, the continuous wave of peaks and valleys is gradually falling, and when the low and high prices are connected, the chart will be in a state of falling to the right.
Range market
A range market is a market where the exchange rate is flat, and it repeatedly reciprocates up and down within a box with a certain width.
If the future market price is unpredictable or if there are few market participants, it is easy to get into such a range market.
Moving average
The moving average line is a line graph obtained by calculating the average value from the price within a certain period.
It is the most representative chart and one of the popular technical charts for a wide range of needs from Forex beginners to professional traders.
Basically, if the moving average is on the upper line, it is judged as an uptrend, if it is flat, it is judged as a cross-shareholding market, and if it is on the lower line, it is judged as a downtrend.
How to read candlesticks
The candlestick is the most abundant information in the Forex chart, and it is especially important to suppress the two, "entity" and "beard".
The "entity" is the part of the candle surrounded by the opening and closing prices. It is also called the body or the actual pillar, and the line protruding from the entity is called the "beard".
Because the positive line shows the blue of safety, the negative line shows the red of danger, and in Japan, the positive line is the red that the sun rises, and the negative line is the blue that the sunsets.
In the case of Japan, basically, if the positive line continues, an uptrend will occur, if the negative line continues, a downtrend will occur, and if the negative and positive lines continue repeatedly, it will be the range market.
Triangle
Triangle means Sankaku Mochiai, and there are roughly three types. The third is the "Descending Triangle", which forms a triangle while devaluing the upper price. In both cases, a trend often occurs when a break occurs.
Flag
A flag is a chart pattern in which highs or lows rise or fall in parallel. In addition, there are two types of flags, and the rising flag is a parallelogram that descends to the right, and in many cases, it rises significantly when it breaks through the parallel line.
On the other hand, the descending flag is a parallelogram that rises to the right, and in many cases, it descends significantly when it breaks through the parallel line.
Double top
The double top is a chart with two peaks on top in the highs, forming a pattern like the English word "M". The best entry timing is the sold sign where you break through the neckline.
Double bottom is a chart that forms a pattern like the English word "W" with two peaks at the bottom in the bottom range.
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