Reading Forex Charts

In This Lesson

Chart analysis specific to forex markets.

Duration: 30 min

Overview

Chart analysis specific to forex markets. This lesson will provide you with practical knowledge and actionable insights you can apply to your trading immediately.

By the end of this lesson, you'll have a clear understanding of the concepts and be able to apply them in real trading scenarios. Let's dive into the details.

Key Concepts

Daily Pivot Points

Key levels calculated from previous day's high, low, and close. Act as support/resistance.

Session Highs and Lows

Important levels created during each trading session (Asian, European, US).

Round Number Psychology

Psychological levels at .00, .50 levels where traders place orders.

Forex-Specific Candlestick Patterns

Patterns that work particularly well in forex: pin bars, inside bars, engulfing patterns.

Currency Strength Analysis

Comparing relative strength across multiple pairs to find best setups.

Practical Application

Now let's put this knowledge into practice. Follow these steps to apply what you've learned:

1. Set up charts with multiple timeframes: daily, 4H, 1H, 15M for complete analysis
2. Mark daily pivots, session highs/lows, and round numbers as key levels
3. Identify trend direction on daily charts before looking for entries
4. Use 4H charts for market structure: higher highs/lows in uptrends
5. Enter trades on 1H or 15M charts with confirmation from higher timeframes
6. Track which patterns work best for each major currency pair

Common Mistakes to Avoid

Using Only One Timeframe

Trading off 5-minute charts without checking higher timeframes for trend direction.

Ignoring Asian Session Price Action

Only analyzing London/NY sessions and missing important support/resistance levels set in Asia.

Misreading Forex-Specific Patterns

Applying stock market patterns to forex without considering currency-specific characteristics.

Key Takeaways

Multiple timeframe analysis prevents trading against the main trend
Forex markets respect technical levels more than fundamental analysis in short term
Session timing affects which levels are most important
Round numbers and pivots create natural support/resistance
Currency strength analysis reveals the best pair setups

Your Next Steps

Ready to continue your learning journey? Here's what to do next:

• Review this lesson's key concepts
• Complete the practical exercises
• Take notes on what you've learned
• Practice with a demo account
• Move on to the next lesson when ready