How to Read Currency Charts
If you begin to take an interest in reading up on the stock market, knowing how to read a currency chart will help you understand what is going on with the currencies around the world. Learning concepts in the stock market may sound hard or complicated, but reading a currency chart is easy for anyone who wants to keep track of the numbers. The two most common currency chart styles are line or bar charts; both are easy to understand.
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Instructions
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Look at the foreign exchange chart to see the currencies being compared to one another. The currencies are often paired---with the first portion being the base currency and the second portion being the terms currency. For example, EUR/USD indicated that the base currency is the euro while the dollar is the terms currency.
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Determine the equivalency between the pairs. The base currency is listed as '1' while the terms currency will constantly be changing. For example, EUR/USD 1.575 indicates that for "1" in euro currency the dollar equivalent is 1.525.
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Watch the currency chart closely if you want to buy a pair for later trading. An ideal time to buy would be when the base currency becomes stronger over a terms currency, and the ideal time to sell a pair is when the base currency is weaker than the terms currency.
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Observe the currency chart constantly since it is always changing over a 24-hour period. Look at the time zone in the exchange provider. For example, if you are watching currency in pounds, it is most likely showing a time zone for Great Britain.
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References
Resources
- Photo Credit currency image by peter Hires Images from Fotolia.com
