Forex charts are the graphics on which the market conditions and values of currencies can be seen on trading platforms. The historical price movements of forex pairs tracked in the forex markets consist of complex data sets.
Analyzing this data can be very difficult without certain technical tools, indicators, and charts. Forex charts, which facilitate the analysis of past price movements, allow data to be visually presented.
This allows forex traders of all skill levels to determine the correct exit and entry levels for a currency pair. Beginners, in particular, should receive training in "forex chart analysis basics."
It is also recommended to explore various chart types through demo accounts during this training period. Increasing experience in the forex markets is essential for developing chart reading skills.
If this is your first day in the forex markets, it's normal to be apprehensive about charts. Charts containing historical data in the forex markets can appear complex and difficult at first glance.
However, as chart reading skills and experience in the forex markets increase, the reading and analysis processes become easier.
BlueSuisse's platform is a good solution for both more accurate chart analysis and for training in chart reading and interpretation.
Investors of all skill levels in the Forex market need experience and knowledge of different chart types. The demo account offered on BlueSuisse makes the process easier to navigate. Open your demo account in just a few steps to browse the market, learn to read charts and create your forex strategies.
Introduction to Forex Charts: What They Show?
Forex charts allow investors to more easily read the price difference of a currency pair over a specific time period in the forex markets.
In these charts, the horizontal axis typically represents time periods such as one day, one week, or one month, while the vertical axis allows for direct price observation.
One of the essential responsibilities for investors of all levels is to receive training in "Simple Forex Chart Reading." Forex markets generally consist of two distinct cycles: bullish, bearish.
A bull market is characterized by an upward trend, while a bear market is characterized by a downward trend.
Investors of various levels analyze the past price movements of currency pairs such as EUR/USD and GBP/JPY using "Forex Chart Analysis Basics."
As experience in the forex markets increases, it becomes easier to obtain more accurate signals from charts. It becomes easier to accurately predict future trends based on past price movements.
According to professional forex traders, one of the best ways to analyze market data using charts is to use a demo account. You can learn by trying to read charts by opening a forex demo account through BlueSuisse.
How To Read a Forex Chart?
Forex investors to be able to read charts correctly, they must first have sufficient knowledge of "Forex chart pattern basics." If you want to understand the dynamics of a market and make more profitable trades, as an investor, you must first correctly identify market patterns.
In this process, the data sets we capture these patterns are accessible through charts. First, determine the general price direction.
Then, identify support and resistance levels on this chart. Support and resistance levels enable accurate buying and selling of a currency pair.
Finally, examining candlestick formations can be a good step. The technical analysis process is managed with tools such as "Forex analysis with charts."
If you, as a beginner, want to improve your knowledge and skills in "Forex chart analysis basics," you should use a demo account for a longer period of time and explore educational materials.
If you want to read charts correctly before trading in the forex market and manage technical analysis processes like a professional, you can simply follow these steps:
- Identify the general price direction, that is, the trend.
- Identifying support and resistance levels is also critical for accurate buy-sell timing.
- Market momentum and psychological factors can be more accurately determined using common indicators such as RSI, MACD, and Bollinger Bands.
- You should not only observe past price movements but also volume changes. If a rising price in a currency pair is supported by volume, it may be a valid signal that the trend will continue in the same direction.
- You should optimize position sizes in line with risk management strategies.
Different Kinds of Forex Charts Explained
There are many types of forex charts frequently used by professional traders in the forex markets.
However, the most common ones can be listed as follows in the "Different forex charts explained" section:
- Line Chart forex trading: The line chart is the simplest chart model and incorporates closing prices. It is most suitable for beginner forex traders.
- Bar chart forex trading: This chart model presents more data. Opening, closing, low, and high prices can be observed on the bar chart.
- Candlestick charts forex: This chart model, frequently used by professionals, simplifies the technical analysis process. It is generally easier to analyze and interpret general market trends and psychology using this chart type.
BlueSuisse's platform integrates with popular investment platforms like MT5, accelerating your learning of technical analysis tools such as charts and indicators.
In addition to these, chart types such as Heikin-Ashi, Renko, and Point & Figure (P&F) have also been introduced in recent years. While different brokers offer different chart and indicator support, the basic principle remains the same.
Today, a professional forex trader can meet all their technical analysis needs with basic chart types and common indicator types.
An Overview of Forex Trading Indicators
In addition to charts, indicators are also an important part of the technical analysis process for forex traders.
The most common examples of "technical forex indicators" can be listed as follows:
- Moving Averages: This indicator allows you to determine the future trend of a currency pair based on data.
For example, after evaluating the short- or medium-term future trends of a currency pair like EUR/USD through fundamental analysis, analyzing past price movements using "Moving Averages" determines whether the price is above or below the average. This allows you to more accurately determine the potential profitability of a position.
- Relative Strength Index: Another popular indicator is the RSI. Forex traders can use this indicator to identify overbought and oversold periods.
A metric is typically used between 1 and 100. If a currency pair is above 70, it is considered a sell signal.
For example, if the RSI value of the GBP/JPY pair is above 70 during a market period, it would not be wrong to expect the pair to stabilize soon.
- MACD (Moving Average Convergence Divergence): As a momentum indicator, the MACD can analyze the correlation between two different moving averages.
Forex traders typically analyze trend direction and momentum based on data using this indicator. If the MACD line crosses the signal line above, we can receive a message that the market is favorable for buying currency pairs.
Accessing charts, learning how to read charts, and developing strategies in the forex trading market are now much easier. Create a live forex trading account with BlueSuisse now and start trading right away!