Today we will consider a basic topic on the issue of how to read the current charts of the foreign exchange market. Without this knowledge, even the best forex indicators will be useless and will not bring any practical benefit to the trader.
A few words about technical analysis
In order to make a correct Forex forecast and fully implement the rules of the chosen earnings methodology, first of all, it is necessary to complete a full graphical markup. It can be used together with any working system and forex advisor as an auxiliary tool confirming or refuting the decisions made.
Attention! The proposed algorithm is considered basic, therefore, it can be supplemented and adjusted at will. Every week, all actions must be repeated so that the trader can operate with the latest data. You can also use Weekly Forecast to better navigate in all the details.
Another caveat: in the example below, we will consider markup designed for medium and long-term strategies (from 1 hour to 1 month). If in your practice you use shorter periods, then follow a similar sequence, but instead of a month, use the daily time frame as a starting point.
Stage 1 – getting to know the schedule
- Black and white candles are market units that demonstrate the behavior of all participants over a selected time period. White candle – reflects the growth of an active asset. It is characteristic during transactions for the purchase. Black candle – shows the fall of the selected instrument and is peculiar when making sales.
- With the naked eye it can be seen that all candles constantly change their orientation: they go up, down or stand still. This phenomenon is called a market trend, which is increasing, decreasing and sideways.
- The right vertical area reflects the price levels that the chart traverses. The highlighted label always shows the current price, which the trader can focus on.
- A window with the name of the selected currency pairs is displayed in the lower horizontal zone. A little higher is the date and time interval during which the candle formed.
- The upper horizontal part is called the workspace, which contains all the necessary elements that allow you to draw lines on the chart, add any indicators, open orders, choose time intervals, etc. There is nothing complicated. To fully understand all the options, it is enough to allocate 30 minutes of free time for training.
You can already read the graphs correctly and give an initial assessment of the situation, so you can go to https://nsbroker.com/en/ and take your first steps. However, in order to consistently receive high-quality signals, it is necessary to add auxiliary elements.
Stage 2 – Find the power levels in the monthly period
In order to make money on hourly charts (any other period), the trader must see the general market picture, understand what trend is dominant, when there may come a period of correction, pullback, breaking through, etc. Do not get carried away too much, because you need to work with Forex charts that reflect the current situation. The deep history is not interesting to us.
Stage 3 – Determine the power levels at intervals from weekly to hourly
Stage 4 – Add flexible support / resistance levels to the chart (Moving Average with periods of 200; 100; 50)
Now you know how to read forex charts and independently create technical markup that facilitates the process of conducting any online operation. Open a trading terminal right now and consolidate your knowledge. Do this even if you do not intend to use auxiliary technical tools in practice in the future. This exercise will strengthen your skills and make you better navigate the mechanics of the market. Trade correctly and practice more.