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Read Forex Charts

To make improved decisions, traders can use three different types of charts, depending on the information they require.

Line Chart

The most basic of all four charts is the line chart, because it shows only the closing price over a specified period. The line chart is created by connecting a series of data points together in a line.

The right side of the chart shows the currency values that generally run below or above the lowest and highest prices reached during a specific period.

Bar Chart

A bar chart gives four key pieces of information for any given period. These include the opening price during that period; the closing price, the low price and the high price. Bar charts can summarize activity over the past minute, hour, day or even month.

Candlestick charts

Candlestick charts indicate the high / low range with a vertical line, as in any bar chart. In candlestick charts, the larger blocks indicate the price range between the opening and closing prices.

Next: Using Trends

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