ead but most software charts will have a zoom function which makes reading closely spaced bars much easier.

Candlestick charts, which were invented by the Japanese to analyze rice contracts, are similar to bar charts but are easier to read as they are color-coded. Green candlesticks are used to show rising prices and r

For the majority of Forex traders their trading strategy will be based very largely on technical analysis. This means, amongst other things, that the Forex trader must have a sound knowledge of technical analysis and, in particular, an ability to read charts.

Price charts are used to convey information about Forex prices at specific time intervals, which can range from as little as one minute up to several years. Prices can either be plotted as simple line charts or price variations can be plotted for each time interval to produce a bar or candlestick pattern.

Line charts are particularly suitable for giving a broad overview of price movements. They are normally plotted to show the closing price at each chosen time interval and they are easy to read and clearly define patterns in price movements.

Although not quite as easy to read, bar charts provide far more information. The length of each bar is used to indicate the price spread for a given period, with long bars indicating a large variation between high and low prices. Opening prices will be shown on the left tab of a bar and closing prices on the right tab so that you can see at a glance whether the price has risen or fallen and just what the variation in price was. When printed out bar charts can be difficult to read but most software charts will have a zoom function which makes reading closely spaced bars much easier.

Candlestick charts, which were invented by the Japanese to analyze rice contracts, are similar to bar charts but are easier to read as they are color-coded. Green candlesticks are used to show rising prices and re

es at specific time intervals, which can range from as little as one minute up to several years. Prices can either be plotted as simple line charts or price variations can be plotted for each time interval to produce a bar or candlestick pattern.

Line charts are particularly suitable for giving a broad overview of price movements. They are normally plotted to show the closing price at each chosen time interval and they are easy to read and clearly define patterns in price movements.

Although not quite as easy to read, bar charts provide far more information. The length of each bar is used to indicate the price spread for a given period, with long bars indicating a large variation between high and low prices. Opening prices will be shown on the left tab of a bar and closing prices on the right tab so that you can see at a glance whether the price has risen or fallen and just what the variation in price was. When printed out bar charts can be difficult to read but most software charts will have a zoom function which makes reading closely spaced bars much easier.

Candlestick charts, which were invented by the Japanese to analyze rice contracts, are similar to bar charts but are easier to read as they are color-coded. Green candlesticks are used to show rising prices and r

movements. They are normally plotted to show the closing price at each chosen time interval and they are easy to read and clearly define patterns in price movements.

Although not quite as easy to read, bar charts provide far more information. The length of each bar is used to indicate the price spread for a given period, with long bars indicating a large variation between high and low prices. Opening prices will be shown on the left tab of a bar and closing prices on the right tab so that you can see at a glance whether the price has risen or fallen and just what the variation in price was. When printed out bar charts can be difficult to read but most software charts will have a zoom function which makes reading closely spaced bars much easier.

Candlestick charts, which were invented by the Japanese to analyze rice contracts, are similar to bar charts but are easier to read as they are color-coded. Green candlesticks are used to show rising prices and r

d, with long bars indicating a large variation between high and low prices. Opening prices will be shown on the left tab of a bar and closing prices on the right tab so that you can see at a glance whether the price has risen or fallen and just what the variation in price was. When printed out bar charts can be difficult to read but most software charts will have a zoom function which makes reading closely spaced bars much easier.

Candlestick charts, which were invented by the Japanese to analyze rice contracts, are similar to bar charts but are easier to read as they are color-coded. Green candlesticks are used to show rising prices and r

ead but most software charts will have a zoom function which makes reading closely spaced bars much easier.

Candlestick charts, which were invented by the Japanese to analyze rice contracts, are similar to bar charts but are easier to read as they are color-coded. Green candlesticks are used to show rising prices and red candlesticks to show falling prices.

When reading candlestick charts the candlestick shapes viewed in relation to one another form various patterns according to the price spread and the proximity are opening to closing prices. Many of these patterns have been given names such as ‘Morning Star' and ‘Dark Cloud Cover' and once you become familiar with these patterns it is easy to pick them out on a chart and to identify trends in the market.

To supplement the information provided by charts a number of technical indicators are also used. These include trend indicators, strength indicators, volatility indicators and cycle indicators and all of these are used to anticipate movements in the market and market volume.

The most commonly used Forex technical indicators include:

Average Directional Movement (ADX). ADX is used to determine whether or not a market is entering an upward or downward trend and just how strong the trend is.

Moving Average Convergence/Divergence (MACD). MACD shows the momentum of a market and the relationship between two moving averages. When, for example, the MACD line crossings of the signal line it indicates a strong market.

Stochastic Oscillator. The stochastic oscillator indicates the strength or weakness of a market by comparin