How to Use Live Forex Bar Charts

Live Forex bar charts are very popular in currency trading analysis. These charts are very easy to use for planning currency trades to buy or sell. The bar chart is a picture of the currency prices on the horizontal axis and the frequency on the vertical axis. Frequencies are generally represented by minutes, hour, week, day and month. It is recommended that traders read a live Forex chart before executing any currency trades.

There are other live Forex charts used for technical analysis. The Candlestick and lines are two other charts used in trading currencies. Also, be aware that charting is only one component of currency trading analysis. There are Forex signal charts, economic and monetary indicators also used to analyze price behaviors. This article discusses how to use the bar chart for Forex trading.

Instructions

1. Use a live Forex chart online service to plot your currencies before trading. These charts are generally free and they provide live currency quotes to the minute. Choose your currency name and the pricing frequency desired. For example for minute by minute prices on the dollar and euro pairing; use USDEURO and choose the minute frequency. You can also choose one currency only. The bar chart will be plotted with a vertical axis (for frequency) and a horizontal axis (for prices).

2. 

   Find the currency "Support" level on the live Forex chart. To do this, find the lowest price on the bar graph that the currency has dropped to over several times. This price is generally a buy signal for traders. This is interpreted as the currency support level; in technical analysis the currency is not expected to fall below this price for the near term. This is also a signal that there are more buyers than sellers in the market for the currency.

3. Look for the currency or the currency pair "Resistance" level on the live bar chart. Look for the highest price the currency has traded over several time. This point in technical analysis is a sell signal because it is assumed that there are more sellers than buyers.

4. 

   Learn to recognize currency trading patterns on the bar charts. Use various historical Forex charts to study and spot price patterns. Historical prices can be obtained for any day in the past. Compare a few of these bar charts and identify uniformity in the currency support and resistance levels. The more you practice this, the easier patterns recognition becomes.

5. Remember that currency prices are not always predictable, expect breakaway points. These are the points when the currency breaks from the previous support or resistance levels to form new patterns. When the currency leaves an old price bottom or top and moves to a new point not returning to the old price, it is likely setting a new trading level.