FOREX TOP TIPS
From price charts to choosing the right broker for you, these top tips will help you negotiate your way through the world of FX
Understanding Forex Charts
Candlestick Chart
Candlestick charts, also known as ‘Japanese Candlesticks’, are popular with traders due to the wide range of information they portray. The chart displays the high, low, opening and closing prices of an instrument. A candlestick has three points: open, close and the wicks.
The wicks show the high-to-low range and the 'real body' (wide section) shows investors if the closing price was higher or lower than the opening price. If the candlestick is filled, then the currency pair closed lower than it opened. If the candlestick is hollow, then the closing price is higher than the opening price.
Bar Chart
A bar chart shows the opening, close, high and low of the currency prices. The top of the bar represents the highest paid price and the bottom indicates the lowest traded price for that specific time period. The actual bar represents the currency pair's overall trading range and the horizontal lines on the sides represent the opening (left) and the closing prices (right).
A bar chart is most commonly used to identify the contraction and expansion of price ranges.
Line Chart
A line chart is easy to understand for forex trading beginners. In a line chart, a line is drawn from one closing price to the next. When connected, it is easy to identify the general price movement of a currency pair throughout a time period and determine currency patterns.
FX Essentials
Remember that you can take your trading to the next level with FXTM’s instructional videos, articles, webinars and glossary, all available for free on the education section of our website. FXTM’s industry-leading educational resources are available in 22 languages and are tailored to the needs of both experienced and novice traders. FXTM also boasts a wide range of Forex tools to help give you the best chance of success in the Forex markets. These include margin calculators, pip calculators, profit calculators, economic trading calendars, trading signals and foreign exchange currency converters.
Before you get stuck in to the wealth of fantastic training material and tools, make sure to review the following top tips. Remember – a successful trader is an educated trader.
How does Forex trading work?
Forex trading is essentially the process of buying and selling currencies in order to make a profit. The price of one currency is linked to the price of another currency in a trade, so you will always work with two currencies at a time. The base currency is the first currency in a currency pair quotation, followed by the quote currency. The difference in price between the currencies is where your profit, or loss, sits.
How do I start trading Forex?
Start by looking for a regulated broker and check to see what protection they offer their clients. Once you have an active account you can trade, but you will be required to make a deposit to cover the costs of your trades. This is called a margin account.
What platform should I use?
FXTM is proud to offer its traders the choice of two industry-leading forex trading platforms: MetaTrader 4 (MT4) and MetaTrader 5 (MT5*).
These platforms, combined with innovative programmes such as FXTM’s Pivot Point tool and FXTM Invest - as well an award-winning customer support team – ensures that FXTM traders have all the resources they need to trade with confidence.
To learn more about the MetaTrader platform – or to download MT4 or MT5* – click here.
*MT5 is not yet available to our UK clients
Trading involves risk. You may lose your capital.
