Charts

 

Technical analysis is the study of historical price movements by using charts in order to
predict future price movements. Charts, and all the various technical analysis indicators
that can be applied to them, are essential tools for traders. In its most basic form, technical
analysis helps you to identify entry and exit points for your trading.

Charts are a major tool in forex trading. A forex chart is a graph representing the movement
of market prices during a specific time period. There are many kinds of charts, each of which
helps to visually analyse market conditions, In this chapter we introduce a few different
charts, go through some basic concepts and explain some of the popular indicators. Once you
understand some of the more basic concepts of technical analysis you can continue your
forex education in the easy-forex learn centre.

identify behavioral patterns, and assess and create forecasts. When traders perform
technical analysis, they usually overlay lines on a chart and apply technical indicators to
reach conclusions about future price action.

Types of charts

Three of the most popular chart types are bar, candlestick and line charts. At easy-forex, you
can view all three types, and choose the one that best suits your trading strategy.
Aside from choosing a chart type, when looking at a chart traders also need to select which
timeframe they want to analyse. A chart is usually composed of many points or bars or
candlesticks, each representing a period of time. In a 30 minute timeframe, the individual point

or bar or candlestick shows what happened to the price by plotting the opening, closing, high
and/or low price of each 30 minute interval. Timeframes can be chosen and changed by
traders, and we’ll look at them in more detail later.
Let’s take a closer look at each of the different chart types a trader can follow and the benefits
of each choice.

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