Fx chart reading is same important as much as Forex time frame. Previous post was all about choosing the Forex time and what type of trader you want to be. After you make up your mind it’s time to learn and understand Forex chart (Fx Chart reading). Forex chart and price action always give the direction of Forex market and help to build a higher quality trading setup.
There are three kind of chart exists on MT4 and MT5 trading terminal; (1) Line chart, (2) candlesticks chart and (3) Bar chart. This three chart giving exactly same information but bar chart is much easy to read than line chart and candlesticks chart is much more visual and informative than bar chart. More details about Forex chart are available in our earlier post. You can pick bar chart as your trading setup but my personal choice is candlesticks and for all our training videos we used candlesticks charts.
The Best way to understand Fx chart properly, we need to understand different chart elements and price actions. Fx Chart always gives you all information that you need to take a trade or stay out of the trade. Below I am placing different Fx chart elements important information that help to understand and read Forex chart.
Price Sequence: Forex market price move continuously and It’s always makes a sequence of price action. The very much last candle body, shape and price action can make effects to the next candle and even the last series of candles direction can make effect to the upcoming new candles. Fx chart price sequence working like magic because all the Forex trader from all over the world watching same Forex candlesticks chart and taking their trading decisions.
Understand the language of the charts: To understand Forex chart lingo or languages you need examine Forex chart properly. Forex chart is not human or robot that it can have spoken able language but it has silent hints of future Forex market direction. Individual trader has own trading method and as long as they are using their trading method on chart direction they will make profit.
Forex market price behavior: I heard somewhere, Forex trader is kind of doctor. When a doctor makes prescription for a patient, they had to understand patients history, health related behaviors and disease symptom properly. The same rules apply to a Forex trader, examine earlier candles history, understanding swing behaviors and determined the symptoms of current market direction.
Forex live chart reading: understanding the basic Forex live chart is very important. Open a chart and give a look on it, the series of candles are going upside or downside. If market is going up then your trading plan will be search for a buying option but if market downside then you go for search a sell option. When you setup a trading plan, makes its simple and try to think simple.
Swing high and swing low: Swing trading is the most conservative trading method. Finding a clear swing pattern is the most important part of trading plan. Market price always goes like a wave. So a series of clear wave on upside is swing high and a series of clear wave on downside is swing low. To be valid swing high trading setup, the wave has to be “swing higher high on upside and swing higher low in down side” and swing low setup is the opposite. Below I am placing examples of swing low trading setup patterns;
[How to find swing high and swing low, Forex swing market definition, How to find chart triangle, Trend resume or broken in congesting area, On the trend; the Conservative trading VS aggressive trading etc subjects will be discuses in the video below]
Building the foundation of Forex trading: Understanding the Fx chart is the foundation of Forex trading. The whole Forex success and profit is depending now how much strong basement you are creating now. Believe it or not, Forex Indicators and Technical Analysis will not help you unless you learn the Basics Forex chart reading. If you know how to take Trading Orders then you are ready for trade but to be successful trader there is no other option then study Fx chart. Bellow this video will teach you a lot about Fx chart reading and it’s better to watch this video several time. This lesson will help you to understand, why it’s important to keep on the trend and how to make a higher quality trading setup.
In this Learn Forex Trading – Module No 1 – Video 004 (Fx Chart Price Reading) Forex video lesson will cover:
- What Price Sequence?
- How to understand the language of the charts.
- Forex market price behavior.
- Forex live chart reading.
- How to find swing high and swing low.
- Forex swing market definition.
- How to find chart triangle.
- Trend resume or broken in congesting area.
- On the trend the Conservative trading VS aggressive trading.
- Building the foundation of Forex trading.