How to Read Forex Charts | DailyFX.com

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Forex Chart Reading 101
Forex chart reading can be encapsulated in the idea that a trader buys in an upward bull market, and sells in a downward bear market. Knowing the direction of the trend is critical; timing the entry of a trade into that trend is also important.

This presentation on how to read forex charts is designed for beginner traders and experienced traders who are new to forex trading. It outlines a simple, proven approach to interpreting forex charts.

Topics include:
• How to read forex charts
• How to identify trading opportunities
• Using charts to determine currency price trends
• Different ways to trade a specific currency pair

Trading the trend
Knowing how to read forex charts takes the guesswork out of price prediction. One simply follows the chart. Rather than predicting what will happen, you simply react to what is happening.

The trend shows what is happening; only trade the strongest trends.

A trader should be able to look at a forex chart from a distance and be able to identify the trend. The first step to setting up a chart to determine the trend and entry timing is to open a daily chart with 1-year of trading data. Then add 200-period simple moving averages. Finally, add your favorite technical indicators to time the entry into the trend.

To determine the trend, look at price action. If price action is above the 200-days simple moving average, it’s an uptrend. If the price action is below the 200-days simple moving average, it’s a downtrend. If the price action has been making higher highs and higher lows, then again it’s an uptrend. Similarly, a downtrend would have lower highs and lower lows.

If a forex chart reads mixed or conflicting trends, then it’s best to not trade until clarity returns. A good practice is to trade more than one currency pair. Monitor price action on several pairs, and choose to trade the ones with the strongest trends for the greatest likelihood of success.

Get more information on how to read forex charts at;
http://www.fxcm.com/forex-basics/how-to-read-a-chart/

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32 Replies to “How to Read Forex Charts | DailyFX.com”

  1. An interesting currency pair to follow is AUD/USD. For most of 2013 the
    Australian dollar weakened against most currencies, but has since recovered
    some ground. Currently AUD/USD is trading in a clear range. The
    opportunity this pair offers is to buy on some of the low points or dips
    and and sell when price reaches levels towards the top of the range.
    Although we can’t be certain how long this range will last, by using
    protective stops, risk can be minimized

  2. If you would have followed his august 2011 usd/chf downwards as he says
    with the graph you would have
    been crucified.Was trading .9240 a month later.Was trading at .8180
    dollars when you was asked to go short.
    Looks like swiss national bank intervention.Like I say follow the charts at
    your own risk.This sharp move
    upwards would have wiped most retail accounts out in a few days.

  3. Define Your Goals
    Before you set out on any journey, it is imperative that you have some idea
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    mismatch will lead to stress and certain losses.

  4. Great video! Any chance you could share the frequency settings or period
    for the stochastics?
    Much appreciated. I’m v new to trading and found your lecture very
    informative. Thanks

  5. I’m not a total freshman in trading (more than a year now), but I find this
    video very important. I’ve been drowning into various sophisticated
    methodologies, like VSA and Clusters. I didn’t become successful with them,
    but my mind had been confused.
    Sir Richard Krivo have reminded me that trading doesn’t have to be
    complicated for being profitable, we should Keep it Simple. Thank You!

  6. Nice video, and it’s a awesome method to work from home. I’ve been working
    from home using Candid Cash Code. To be honest, we earned $322.54 last
    night :). Search google for the term Candid Cash Code to find out how.

  7. I just picked back up on studying trading- out of all the videos I’ve
    watched this far; this one seems to be the easiest to comprehend. Very
    straight forward and simple to understand. -Alex.

  8. Very good presentation. Simple and short. Will also advise anyone willing
    to follow this strategy to apply candle stick patterns with fibonacci
    levels of retracement to give you close to accurate entries.

  9. Definitely one of the most clear and useful lessons out there. I hope to
    see this guy produce many more!

  10. I now trade using moving averages with the pipdaq setups which are based on
    price action entries and seem very good together for solid profits…

  11. Excellent Video! Very educational for beginners like me. thank you Richard
    Krivo

  12. Been getting really interested in FX trading, very good video to get a good
    understanding on how to trade.

  13. excellent presentation Sir. Its great for freshman. And it is really
    helpful. Do not fight with market, just follow it. And also How much profit
    you are willing to gain equals to how much loss you are prepare to take

  14. I haven’t started trading yet, I need to learn and study as much as
    possible about FX. Thanks for this video, it’s very basic

  15. This is how you should go for, Spread is an important part of Forex
    trading for traders and brokers as well. Brokers make money from every
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    your profits investing you should look for a broker that Traders must know
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