The first question that comes to mind when a trader wannabe sees the real time Forex charts for the first time is how to read and interpret them. Nevertheless, in order to answer that question you have to know what the chart is and what it represents. That visual projection of data displays the historical price changes of a certain pair of currencies. The charts trace the price changes on the Y axis, while the X axis represents the time. The charts presentation differs due to the varying frequencies based on which the Forex market operates. It can also be due to the huge amounts of data that are generated all over the world.
Even if real time Forex charts look difficult to understand, they are not much different than the stock charts. If you have any background knowledge and understanding of the way the currency market operates, it should not take long for you to learn and master reading and interpreting these charts. The first thing that you have to do is to select a currency pair and a specific time period that represents the length in time of each bar on the chart. You may have also noticed that there are different charts representations, such as line, candle stick or OHLC charts. The candlestick real time Forex charts are the most commonly used by both professional and amateur currency traders.
If for instance you have chosen the EUR/USD pair and the market value fluctuates around the 1.4500 value, this means that 1 unit of the EUR currency is equivalent to approximately 1.45 US dollars. You can also change the time frames, which are usually set at 1 minutes, 5 minute, 15 minutes, 1 hour, 4 hours, daily, and weekly. However, you are going to choose the time frames according to the trading system you will follow. Each system employs one or two specific time frames that are used to confirm the trends and patterns observed on the real time Forex charts. Last but not least, keep in mind that even if the Forex market is only closed during weekends, time zones are important to be kept in mind as well.
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