Forex Charts Explained Trading at the Forex Market
There are three different Forex charts of use when trading at the Forex market.
Let me introduce you to them: Line charts, bar charts, and candlestick charts.
We have a strong preference for the candlestick charts because they give us the most information.
Line Forex Charts
So a chart with just one line the shows us the movement of the quote.
Line charts are easy to read and show us the trend in the Forex charts.
Also good at using to see the Support & Resistance levels.
Although the line chart gives us information about the history of the pairs price, it’s hard to see the individual prices.
Bar Forex charts
The Bar charts show us individual prices for a certain time period.
Every bar has it’s own information and will so give you a more accurate view of your positions.
The bar has an open, high, low and closing point.
Candlestick Forex charts
Most traders use the candlestick chart because they tell us a lot of clear information.
Especially the Price Action is really recognizable.
Don’t get confused, the candlestick shows us the same information as the bar charts, however, it’s easier to read.
Candlesticks give good information about the highs and lows at a certain timeframe.
Japanese Candlestick Trading
Back in the day when Godzilla was still a cute little lizard, the Japanese created their own old school version of technical analysis to trade rice. That’s right, rice.
A Westerner by the name of Steve Nison “discovered” this secret technique called “Japanese candlesticks,” learning it from a fellow Japanese broker. Steve researched, studied, lived, breathed, ate candlesticks, and began to write about it.
Slowly, this secret technique grew in popularity in the 90’s.
To make a long story short, without Steve Nison, candlestick charts might have remained a buried secret. Steve Nison is Mr. Candlestick.
Want to learn more about Candlesticks? Download the Free E-BOOK!
You’ve met the PIP yet.
Cute little happy word isn’t it? Well that’s exactly what it is since this cute little word will make you very happy and rich if you use it the right way.
You need to completely understand how to calculate your wins and losses through the PIP.
Otherwise don’t even bother start trading.
The unit of measurement that indicates the change in value between two currencies is what you call a ‘pip’.
If the EUR / USD pair rises from 1.2250 to 1.2251, then the .0001 USD increases in value 1 PIIP.
Simply, a pip is the last decimal figure of a quote
Most pairs are shown to four decimal places, but there are exceptions such as the Japanese yen (to two decimal places).
But watch out!
There are brokers that show currency pairs different from the standard “4 and 2” decimal, but instead using’5 and 3′ number decimals. What they actually do is showing fractional pips, “which are also called ‘pipettes. For example, GBP / USD 1.51542 1.51543 moves, then it rises .00001 1 PIPETTE.
As each currency has its own relative value the value of the pIip must be calculated for a specific currency pair.
We give an example in which we use a ratio of 4 decimal places. In order to explain the calculations easier we exchange ratio set down like – so: EUR / USD at 1.2500 is “1 EUR / USD 1.2500.
(The value change in the “counter currency”) X (the exchange ratio) = pip value (in terms of the base currency)
Continuing this example, if we sell 10,000 units USD / CAD, then one piIp change of exchange rate changes of approximately 0.98 in the position value (10,000 units x 0.00009804 USD / unit). We say “approximately” because when the exchange rate changes, the value of each pip move is also changing.
Last important question that needs to be answered
if you calculate value of your position is: ‘What is the value of your pIip in terms of your account currency?’
You’re trading at an international market you remember? So not everyone on the whole world has chosen the same currency for their account.
Trading strategy. The difference between a professional Forex trader and an amateur is like a boxing match between an Olympic champion and your neighbor. A professional trader is able to predict the future better due to good strategies that he or she has developed. The professional trader knows everything about risk management and how to keep himself under control and never get emotions the better of him.
You’ve got to be strong psychologically to make more and more winning trades. You’re not always going to make winning trades, sometimes you will make a bad one. The art of the game is to minimize your loses and maximize your winnings. Sounds simple right? Keep on reading and you will learn how to do this.
“A trader who has never lost, is not a trader yet.” Aristotle.
It’s very important to read and be able to analyze the graphs really well. In the end it is all about recognizing patterns that have occurred in the past and may well be happening in the future again. Remember the Forex market is always on the move.
⦁ Technical Analysis
It’s like dating. You’ve got to get to know the other person really well to press the right buttons for him or her. In trading technical analysis of a certain pair is really important. Get to know the pair your trading to predict any movement in the future.
Ask yourself questions as: What is the price at the moment? What was the price? What happened when the price was at this certain level? The answers on these questions will give you a possible outcome in the future. And so a possible right moment to make your trade.
You don’t think this is the only Trading strategy right? Since there are a lot more strategies at use at the Forex market.
For example: Drawing trend lines, support and resistance lines, the candlesticks and the different indicators. Every trader uses its own way to analyze the market.
⦁ Fundamental Analysis
Fundamental analysis is also called the old fashion way since it’s used by traders who mainly focus on the economic news.
The idea of trading of the economic news is that the currency will follow the economic news. It is certainly important since it can change the prices but more than often the Forex market reacts in a different way as expected. Take the Brexit as an example. This had a bad influence on the value of the GBP. But that doesn’t have to be the case all the time. You will see that traders who trust on fundamental analysis get confused when it goes the other way.
⦁ Swing Trading/Trend Trading
Swing trading is, the word gives it a way a bit, trading on a swing. Simply, traders are looking for a pair with a predictable big swing ahead.
Swing traders are the hit and run kind of people. They make a trade, get a few percentages profit and close their trade. Most often swing traders are cautious traders. Like a leopard, they wait for the right moment to attack and give it their all when that slightly weak dear is running by.
The swing traders work with the Stop-loss that protects you from big loses. More about Stop-loss later on.
Trading strategy for a trend trader is pretty plain and simple: Make sure you’re there when it happens and stay as long as you can until the trend reveres. Thought of a trend trader is that the price will keep moving in a certain direction otherwise it wouldn’t be a trend right? If the price, unexpectedly moves the other way it’s not a trend and the trend trader gets out of the hot kitchen before he burns his fingers.
These particular trading styles can be very successful if you have the right patience and know where to go for the kill. Mostly you will go for the kill at a retracement point.
-Up Trend: If the trend goes up the Euro is worth more.
-Down Trend: If the trend goes down the Euro will lose in value.
-Sideways Trend: Prices move in a narrow range.
⦁ Day Trading and Scalping
A common style of Trading strategy is Day trading. Day Traders are traders who strive to make money on a daily base on the Forex market and make as little as 5 to 10 trades a day.
Day traders who refuse to hold on to their position for one night work with a real tight Stop-loss and hold on to their good positions. For example the EUR/USD pair is the ADHD kid of the class who can’t sit still and is the pair that moves the most. An average of 80 PIPs (More about PIPs in a few moments) a day. So these movements need to be a top focus for a day trader.
Scalping is a sort of day trading. Scalpers trade in a relatively short timeframe as five minutes. Every trade they make will be between 5-10 PIPs. Imagine going for a 10km walk. And every 10 meters you find yourself a dollar on the ground. You will finish your walk with a $1,000,- in hand. You see, a lot of small trades will end up being a big one. Scalping is for the thrill seekers under us. It requires constant focus.
Pick the Trading strategy that fits you as a person. If you like to analyze and wait for the right moment don’t go scalping. Another way around. If you are that thrill seeker, don’t go bore yourself with analysis.
If you want to know more about Trading strategy, look at the coursebook!
One of the most important investment decisions you’ll make has nothing to do with stocks, bonds or mutual funds. This crucial decision is picking a broker. There are dozens of companies offering brokerage services on the internet. And many of them are just as good or better than traditional, brick-and-mortar businesses. But how to decide which one is best for you? What are the best brokers?
Multi Currency Forex Best brokers.
One of the main aspects of choosing a Forex Broker that does need. keeping in mind is that you will be looking for a Broker that will allow you to sign up. Based on where it is you live in the world. But also you will want to be able to fund your trading account in your own home currency.
By locating a Forex Broker that will offer multi currency options to their new traders.
When registering a new account you are then not going to be forced to pay currency exchange rate fees. When you make a deposit into your Forex trading account nor will you lose out via currency exchange rate fees. And charges when making a withdrawal either!
Bonus Awarding Forex Best brokers
Locking in the best value is what every Forex trader will be looking to do on every single trade. Or as many trades that they place as is possible. One way which you are going to be able to do just that is by making use of some of the plethora of different bonus offers. That will be on offer to you. With that in mind please take a good look through individual Forex Broker reviews. As by doing so you are then going to discover which Forex Broker is going to be offering you the best value. And the highest valued bonus.
What Banking Options will be available to me?
You are going to find that the easiest way to move money both into and out of any online or mobile Forex trading account. Will be by you using a debit card linked up to your bank account, as by using such a card all deposits will be made in real time and will reflect in your account instantly. However, do keep in mind that if you would prefers not to use a debit card linked up to your bank account. There are lots of different options that you can choose to use including credit cards, web wallets and even prepaid vouchers, so plenty of banking options will be available to you.
Accessing a Demo Trading Account
You are not going to know whether you actually like the design and service offered at any Forex Brokers. Until you actually test out those brokers trading platforms either online or via a mobile trading app. And with that in mind you should initially open up a demo trading account. By opening up a demo trading account which by the way you can easily do in a matter of minutes. At any of our feature Forex Brokers you can then test out their individual trading platforms and get a true feel for the way that they all work and operate but in a no risk trading environment.
Will Mobile Trading Apps Be Worth Utilizing?
The way in which all of our featured Forex Brokers have designed their mobile trading apps. Is such that no matter what types and kinds of Forex trade you are looking to place you are always going to find then being offered to you via those apps.
All of the different trades you can place via an online trading platform.
will be available to you via a trading app and you will of course have access to just as many bonus offers and promotional offers. When using a Forex trading app as you will when using an online trading platform, so they are certainly worth utilizing.
Are There Any Additional Fees and Charges?
By looking over the trading platforms and making a note of the financial gains that can be make on every single trading opportunity. Available to you then when you place those trades you will not have to pay any additional fees and charges. When you place those types of trades or when you have made a profits on them.
However, do keep in mind there may be some additional fees and charges that you will have to pay in regards to sign some banking options.
However those charges are not usually levied upon you via the Forex Broker but by the operator of those banking options. Such as when you using a web or e-wallet those companies will have some nominal fees and charges. That you will have to pay for using their services.
Placing a trade in the foreign exchange market is simple: the mechanics of a trade are very similar to those found in other markets (like the stock market), so if you have any experience in trading, you should be able to pick it up pretty quickly.
The object of forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold.
You purchase 10,000 euros at the EUR/USD exchange rate of 1.1800
Two weeks later, you exchange your 10,000 euros back into U.S. dollar at the exchange rate of 1.2500
You earn a profit of $700
*EUR 10,000 x 1.18 = US $11,800
** EUR 10,000 x 1.25 = US $12,500
An exchange rate is simply the ratio of one currency valued against another currency. For example, the USD/CHF exchange rate indicates how many U.S. dollars can purchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar.
We Provide a high-quality signal service, We provide our signals in the WhatsApp group wanna try the trial version? first 48 hours free!
How to Read a Forex Currency Exchange Quote
Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is because in every foreign exchange transaction, you are simultaneously buying one currency and selling another. Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar:
The first listed currency to the left of the slash (“/”) is known as the base currency (in this example, the British pound), while the second one on the right is called the counter or quote currency (in this example, the U.S. dollar).
How to make money with forex
When buying, the exchange rate tells you how much you have to pay in units of the quote currency to buy one unit of the base currency. In the example above, you have to pay 1.51258 U.S. dollars to buy 1 British pound.
When selling, the exchange rate tells you how many units of the quote currency you get for selling one unit of the base currency. In the example above, you will receive 1.51258 U.S. dollars when you sell 1 British pound.
The base currency is the “basis” for the buy or the sell. If you buy EUR/USD this simply means that you are buying the base currency and simultaneously selling the quote currency. In caveman talk, “buy EUR, sell USD.”
You would buy the pair if you believe the base currency will appreciate (gain value) relative to the quote currency. You would sell the pair if you think the base currency will depreciate (lose value) relative to the quote currency.
Long/Short / How to make money with forex
First, you should determine whether you want to buy or sell.
How to make money with forex
If you want to buy (which actually means buy the base currency and sell the quote currency), you want the base currency to rise in value and then you would sell it back at a higher price. In trader’s talk, this is called “going long” or taking a “long position.” Just remember: long = buy.
If you want to sell (which actually means sell the base currency and buy the quote currency), you want the base currency to fall in value and then you would buy it back at a lower price. This is called “going short” or taking a “short position”. Just remember: short = sell.
IC Markets True ECN trading environment allows you to trade online on institutional grade liquidity from the worlds leading investment banks and dark pool liquidity execution venues, allowing you to trade on spreads from 0.0 pips. You can now trade along side the worlds biggest banks and institutions with your order flowing straight into our true ECN environment.Trade in a true ECN environment with no dealing desk or price manipulation. IC Markets is the online forex broker of choice for high volume traders, scalpers and robots.
For USA & Canada clients i recommend FXChoice which is also a very good broker.
Enjoy this blog? Please spread the word :)
error: Content is protected !!