Forex live chart is a necessity if you are planning to do your own market analysis. ‘Live’ here means the service that provide it will use current actual market data to create the chart. Basically, it is a very useful information tool to have even if you don’t do your own analysis.
First of all, you have to pick the currency pair that you want to analyze; it usually comes in the form of a drop down menu. Once you get the one that you want, select the chart type, it typically is available in four forms: Line, Bar, Candlestick, and Table. If you are a beginner, I suggest to begin with a Bar type. Once you select the type, choose a time frame such as one minute, five minutes, daily, weekly, etc.
In a bar chart, every vertical bar which you see signifies a time frame. The top of the bar is the highest price and the bottom of the bar is the lowest price during that particular time frame. For each vertical bar, there are two horizontal bars, one to the left and the other to the right. The left bar represent the opening price and the right bar represent the closing price for that time frame. Note: Utilize the zoom feature to see it in detail.
If you are going to use forex live chart, you should at least know these things:
Understanding Support and Resistance
The market volatility can bring it anywhere and no one can predict it 100%. But based on historical data, there are some condition where the price doesn’t exceed or below a certain price for a period of time.
Instance:
-From July to December, the EUR/USD prices never go beyond 1.645, that means 1.645 is the resistance for EUR/USD during that time period.
– From January to May, the USD/JPY prices never fall under 90.070, that mean 90.70 is the support for USD/JPY during that period of time.
Entry and exit point can be decided based on these support and resistance data. An orthodox approach is buy at support and sell at resistance. There is also more advanced strategy such as buying at resistance breakout and sell at higher price; it is all depend on the currency, circumstances, and your trading system.
Note: A time when the price has moved passed support or resistance line is called breakout.
Indicators
A good chart software also allows you to add various indicators. Indicator is a mathematical calculation based on prices which you can use to help you come up with decision. For instance: MVA indicator can present you the average price for a particular period, EMA show you the weighted price calculation for a certain period, etc.
Forex live chart can be used in various other ways to support a trader and understanding the basic function is a good start for your trader career.