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Professional traders read Forex charts in order to find price patterns and remove any guessing from predicting future market movements. The chart patterns become a map that dictates how to trade, and a trader need only follow what the charts are telling them to do. Technical traders don't try to predict what will happen to the market, but instead, react to what is currently happening in the chart data.
The most popular forex charts are the bar charts, candlestick charts, and line charts. These are simple illustrations to demonstrate the main differences between them.
Bar charts are widespread charting method, where all currency pair price information for any single day is shown on a vertical line. The first price on a bar chart is the opening price and it’s marked as a little node on the left of the bar. The closing price is marked as a second node on the right of the bar. The ceiling the price reached during the day is the high price, and the price floor or the low price is also shown.
The patterns these charts display are a summary of all the activity, from all market participants, and give a trader insight into the collective market psychology. It is the interactions between the buyers and sellers that generate volatility, and studying the charts help identify the best moments to buy or to sell currency pairs.
Overlaying technical analysis tools on charts help predict future price action, and give insight into the market direction and the strength of the trends.
Total volume is the sum of all orders on the market - both buying and selling. If there are more traders buying than selling, the value of the currency will increase, but if there is more selling than buying the value of the currency will decrease.
If the current price is rising but volume is decreasing, this can be an early sign that the trend is losing momentum and could reverse, and the same holds true if it the currency price is falling, but volume is decreasing.
There are a number of set time frames used in charting the Forex market. All Forex trading platforms offer charts starting from the 1-minute chart, to the weekly chart, and even monthly charts. Higher time frames, such as the daily chart, provide a better perspective for analyzing support and resistance levels, but each of the time frames has advantages and disadvantages for different types of trader.
Compare the best Forex brokers in the Malaysia and find the one that suits your trading style and budget.
Explore the best Forex brokers for beginners in the Malaysia with user-friendly platforms, educational resources, and demo accounts.
Regulation is the most important consideration when choosing a broker. Learn how regulators protect traders and how the Forex market is regulated.
Senior Financial Writer
Alison joined the team as a writer in 2021. She is the Senior Financial Writer for FxScouts. She has a medical degree with a focus on physiotherapy and a bachelor's in psychology. However, her interest in forex trading and her love for writing led her to switch careers. She has a passion for Forex trading and over a decade of editorial experience researching Forex and the financial services industry, producing high-quality content. She hosts a weekly podcast, "Let's Talk Forex", alongside Chris and has produced over 100 Forex educational videos for the FxScouts YouTube channel. She also writes weekly technical analyses and has tested and reviewed over 100 Forex brokers.
Head of Content
Head of Content at FxScouts since 2019, Chris Cammack ensures all content meets our high standards of quality and clarity, shaping editorial guidelines and overseeing broker reviews. Chris brought 10 years of experience in research, editorial, and design for political and financial publications, and has a deep knowledge of international financial markets and geo-politics. He co-hosts the "Let's Talk Forex" podcast with Alison and writes for the news section on a regular basis.
Financial Writer
Ida is a financial writer with a degree in Digital Marketing and a strong background in content writing and SEO. Her expertise extends beyond marketing and writing, with a keen interest in cryptocurrencies and blockchain networks. Ida's passion for crypto trading sparked a deeper fascination with Forex technical analysis and price movement. She is continually expanding her knowledge in Forex trading, staying informed about the latest trends and identifying the best trading environments for new traders.
