Becoming a trader in the fx rates market requires that you have extensive knowledge of the events that affect a country’s economic climate. You need to be aware of the news announcements and fx rates trends that may affect your currency pairs. To enable smoother trading, you should determine the simplest and fastest methods to act as indicators for your entry into the market and your exit from a trade. Graphs indicating the relevant FX rates at a certain point are an ideal source of information for both current and historical views of the currency trend.
Availability of FX Rates Charts
There are a variety of charts available on the internet. Many websites offer charts along with information related to the daily exchange rate, including FX converters. Most trading platforms offer various types of charts to the users. You should determine which charts your forex broker’s trading platforms offers and use them if they are applicable to your trading strategy and method. The most suitable charts are not always the ones that offer you huge amounts of information. You may find some charts suitable for your use which other traders may not want to use. You need to find the most suitable charts that will offer you profitable trades.
FX Rates Line Charts
These are the simplest and most widely used charts in the foreign currency exchange world. It indicates the general trend of a particular currency over a specified timeframe. The value of the currency is plotted over the time specified and the figures are connected by lines. You can make use of this chart if you wish to check on the trends for a particular currency.
These charts offer you more information that the basic line charts. It not only indicates the relevant trades for a currency, but also provides you with an indication of the price the currency opened at and the price it closed at. The more effective form of this type of chart offers you more in-depth information related to the currency which gives you more chance of accurate predictions of the rate. The added features linked to this type of chart often confuse those who do not have the experience to use the additional information to their advantage.
Figure and Point Graphs
These are graphs that are used quite often, however many consider them to be quite difficult to understand. It uses symbols, instead of bars and lines to indicate the points. The symbols used most regularly are O and X. These symbols will indicate if there was an increase or decrease in the currency price.
These graphs are very similar to the bar graphs. It is used by many professional traders, rather than the bar graph. It makes use of colour, normally green and red, to show the levels of the data used. If the closing price of a currency is lower than its opening price, the graph will indicate it in red. The green graph colour is used in cases where the price the currency closed at was higher than the price it opened with. It is an easy to read graph that allows you the facility to make quick decisions about the trend the currency is following. In candlestick charts that do not make use of colours, the chartists normally use black and white which represents the red and green of the coloured charts.