The main analytical object in forex trading is price movements, one of which is in the form of charts. Commonly used charts are candlestick charts, line charts, and bar charts. Then how to read forex charts or forex charts in general ?
In general, the movement up from the chart of one particular pair shows the strengthening of the base currency pair against the quoted currency pair. On the other hand, the movement down from the chart of one particular pair indicates a weakening of the base currency pair against the quoted currency pair.
What is a base currency is the currency stored at the beginning of the pair. While quoted curency is the currency stored at the end of the pair. Let’s say EUR/USD , EUR or euro is the base currency, while the USD currency is the quoted currency.
Examples of how to read forex charts simply
The EUR/USD pair chart above looks to be moving up, indicating a strengthening of the EUR or Euro currencies against the USD or dollar. Price is seen to be at 1.3281 , this means 1 EURO worth with 1.3281 USD.
In practice, the way to read forex charts can be developed so that it is more detailed and specific again with the help of a specific strategy or trading system. With the help of a trading strategy or system, you can find when to enter the market/ make transactions, when to close transactions, and when to close losses.
You can learn the simple trading system that we prepare as a learning material for you in the practice section tradin