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Make Good Use of Forex Charts

Date Added: March 18, 2012 07:42:55 AM
Author: admin
Category: Business: Foreign Exchange

 

A very important and helpful tool in forex trading is forex chart. The forex chart is divided into different types that contain changing prices. A forex chart will help the trader to know the values of different currencies and predict the future of those currencies through which he or she will be able to do the buying and selling of the currencies and earn good amount of profits each he or she makes a move.

 

The types of forex charts available to the traders are line charts, bar charts and candlestick charts. Following is the further description about these charts: -

 

  1. LINE CHARTS: -  

This is the simplest type of chart; it shows the rates of the currencies and its fluctuations every five minutes. This chart does not show the rates at the time that the viewer has selected or wanted to see but the closing rates of the currencies changing every five minutes. This chart gives some support to the trader in the forex market but not all.

 

  1. BAR CHARTS: -

This chart is different from the line chart and a bit complicated. It shows the rate at three time intervals, the high the low and the closing. Some bar charts also include the third rate which is the opening rate. This chart provides the trader with more detailed information about the different currencies at different time intervals, as per selected by the forex trader.

 

  1. CANDLESTICK CHARTS: -

This chart follows the prehistoric Japanese methodology in which the prices are represented in the shape of candlesticks. Opening, high, low and closing rates are viewable for every time interval that trader wants to see. The trader has to learn the patterns of this chart to understand it and make better use of it.

 

The forex trading charts are not present to predict the future, therefore, do not make the silly mistake of predicting the future because there are lots of chances that you will lose. However, you should first learn how to use these charts before getting into this business and make use of the price changes and trends instead of playing a guessing game.

 

Make the use of the charts in a way that you are able to match the actual price occurrence with the technical and fundamental events happening in the country of the currency in which you want to invest. In the beginning, inexperienced forex traders will find these charts very confusing to read however as the time pass it will become easy for you and you will enjoy using the forex trading charts.