The closing price is often considered the most important element in analysing data. This chart represents only a closing price over a period of time. Line Chart – This is the most basic of trading charts, and the stepping stone for the beginner trader. Each chart type offers a variety of different information according to the traders’ individual skill level: There are three main chart types that are popular among trading circles. To learn more about identifying trends and the duration of trends, skip across to our Trend Trading Guide. A ranging market is when the price of the asset hits the same highs (resistance line) and lows (support line) at least three times in succession. There is a third kind of trend that is known as the sideways, flat or horizontal trend, which moves across.
When you hear of a Bullish trend, you are looking at an overall upwards trend (imagine a bull charging) and a Bearish trend is a sequence of descending lows and highs (imagine a bear hiding in the woods). In short, a chart is a depiction of exchange rates that happen between two financial instruments that are plotted and illustrated on a graph. Let’s start by understanding what a trading chart is, before zooming in on patterns and indicators.
XSTAND TRAND DRIVERS
On the other hand, fundamental traders prefer to follow news sources that offer information on economic growth, oil supply, employment data, interest rate changes and geopolitical drivers like war and political instability. They prefer to follow the predictive powers of charting tools and indicators to identify peaking trends and price points, in order to guide them when to enter and exit the markets. Traders that use charts are known as technical traders. This article aims to kick you off on your journey to understanding and using charts to enhance your trades.
Like all things in life, the more you practice, the more you enhance your skills. The ability to read trading charts is part and parcel of trading, and the more you understand about technical analysis, the better a trader you can become.
XSTAND TRAND HOW TO
No matter what asset you are trading, you need to know how to follow charts. Identifying trends, whether they are moving up, down or across and also knowing when they are about to reverse is really key to your Forex trading.
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