Forex Charts

When approaching the forex to trade, there are two ways you may analyze the forex market: using fundamental analysis or technical analysis. Although some analysts would argue that one is better than the other, finding a middle-ground between both approaches is usually the common recommendation.In brief, whereas fundamental analysis deals with economic, political and social developments and their impact on the supply and demand forces, technical analysis deals with price movements. Forex charts are generally associated with technical analysis. Basically, once you enter the world of forex technical analysis, you also enter the world of online forex charts. Since technical analysis focuses on the study of price movement (current, past and future), it uses all sort of graphs and forex chart indicators. Viewing those different types of forex charts will help you identify forex trends according to which you will make your trading decisions.When looking at such a chart, you are viewing historical price actions which in some way will give you an idea of where the price is heading to. Here, you are looking at a candlestick chart.There are three common types of Forex charts:Line Chart: a very basic chart. A line chart is made up of contiguous lines connecting one previous closing price to the next. Bar Chart: Like the line chart, the bar chart shows the closing price of a given currency, but it also shows its opening price and it's high and low. Candlestick Chart: probably the most popular type of charts. On top of showing you the closing, opening, high and low prices, it gives you an indication about the strength of the buying and selling forces. To read those charts beyond the obvious, traders have at their disposal a wide range of trend indicators to help them identify good trading opportunities as well as good entry and exit points. You can apply indicators to each type of forex charts. However, interpreting those forex charts requires precise knowledge of the chart indicators you choose to use and although it may seem easy, identifying forex trends can be quite difficult. Each type of chart will give you more or less the same information but in a different form.