A Forex chart is ansimple image showing a trader the price of different pairs in the Forex market. Forex currency charts are displayed in Forex charting software, which is available for free after opening a trading account with any Forex broker. Forex charts usually show the relationship between two currencies. In addition to currency exchange, stock trading is also possible through Forex charts.
Forex charts are shown in different time frames. Such as 1 minute, 5 minutes, 15 minutes, 30 minutes, 1 hour, 4 hours, one day, one week, and one month. Traders can set the time on the chart at their convenience. The time frame is essential to the trader for different types of analysis. The market currently has a variety of charts. Here we have discussed some of them.
Line charts basically show price trends through line connections. Through can be seen. We can see the overall market condition and support-resistance level of the Forex market by this chart. The line is added to the one-time high value to the subsequent high-value, low-value to low-value, and so on. You can use this chart if you want to know the current trends of your choice.
The bar chart shows the price of a particular currency through the bar. If you choose a one-day chart, it will show you a bar after every 24 hours. If you select a 15-minute chart, it will show you a bar after every 15 minutes. There are various time frame charts available for your convenience. We can take a total of 4 pieces of information from a bar to make our trading decisions. They are- Bar start, low, high, and off. To know more about the bar chart, you may use the demo account from Saxo. Get it from here and learn to use the bar chart in an efficient manner.
Candlestick charts display information like a bar chart, but it has a graphic value, so it is suitable for traders. This chart shows high and low values like bar charts through vertical lines. A bar usually has two vertical lines, the upper line of the bar is called the upper shadow, and the lower line is called, the lower shadow.
These three charts are the most widely used in current Forex trading, especially the Cadellstick chart. But there are more kinds of charts that hold their usefulness to its users. Now let us discuss how to analyze the candlestick chart pattern.
Candlestick Chart Pattern Analysi
The Candlestick Chart was first introduced to the Western world by Steve Nisson in his famous book, Japanese Candlestick Charting Techniques, published in 1991. This analysis is done through candlestick charts. These charts show multiple time frame information in a single price bar, similar to a set of technical tools.
Candlesticks create a kind of pattern that helps to understand the direction of the price. Some patterns can be easily identified, such as Three Black Crow, Bearish Black Cloud Cover, Evening Star, and some single bar patterns have been identified, such as Pin Bar, Dodge, and Hammer. Etc. which are beneficial for short-length trading. There are some notable patterns of candlestick analysis that most traders use to trade for success.
- Pin Bar
- TLS or Three Line Strike
- Two Black Gapping
- TBC or Three Black Crows
- Evening Star
- Abandoned Baby
- Engulfing Bar
Candlestick chart patterns are traded based on assumptions, where some patterns appear in the market consistently, and the subsequent results are expected to be the same as in the past. However, no pattern can guarantee you 100%.
Currently, most traders trade through chart analysis. Because it is simpler and more effective than fundamental analysis, so you can learn better and take your trading. This article will be helpful to its reader.