How to read technical analysis charts.

The chart in the trader’s terminal is the main object that technical analysis studies; even without using special indicators, you can learn quite a lot simply by reading the chart of a currency pair.

Most of the indicators necessary for technical analysis are visible to the naked eye, and the chart makes it possible to get an idea not only of the current market situation, but also to find out what happened with a given currency pair a month or a year ago.

What information does a currency pair chart contain?

• The name of the currency pair is in the upper right corner of the chart.
• Time frame - a time period that is equal to one candle, for example on M1, the formation of one candle takes 1 minute.
• Current quote - the price at which you will buy or sell a currency pair.
• Information on a candle or bar - opening time, maximum price, minimum price, closing time.

How to read Forex charts correctly?

First of all, you should take into account that if you open H1, this does not mean that the screen contains information only about the price movement within an hour.

This time period corresponds to only one candle. At the minimum scale, this chart shows a trend of approximately two weeks.

Therefore, all indicators will correspond to a two-week time period. In order to obtain information specifically for the current hour, you should go to M1 and use the scale to adjust the chart.

You can, of course, simply select the required time period, but the described approach is more convenient.

The main indicators that can be obtained thanks to the chart of a currency pair:

1. Price minimums and maximums - by selecting the required time period, you can find out the maximum and minimum prices on a given time frame.

To do this, we simply select the highest and lowest point of the trend. If you want to find out the price for the past time period, it’s even easier to do this, for example, select the time frame D1 and hover your mouse over the desired candle, in the tooltip you will find all the necessary information on the price for the day.

What do these indicators tell us?

If the market is currently experiencing an upward trend, but the price is still quite far from the maximum on a given time frame, then there is a high probability of the existing trend continuing. 2. Trend direction - often looking at the chart of a currency pair, you can easily determine the main direction of the trend.

At the same time, we should not forget that you will find out where the price is moving precisely on this time period, and in order to see the full picture, it will never be superfluous to look at adjacent time frames.

3. Market volatility - or how wide the range of price movement is, is defined as the distance between the highest and lowest price.

4. Speed ​​of price movement - for example, per day, at the beginning of the day the price was 1.3545 at the end of 1.3665, which means the price moved 120 points during the day.

5. Opening price and closing price - that is, at what price the selected time frame opened and closed.
What is it for?

This way we can measure the potential of a currency pair and at least roughly estimate how much profit we can expect from this instrument. A currency pair chart is an excellent source of information for visual analysis of the market; the correct use of several simple parameters allows you to get your own idea of ​​the trend.