How to learn to read graphics of quotations?

Ted Capwell

So, it came to quote charts. This means that you have already gone through all the previous stages of preparation: you

  • have found a reliable broker;
  • registered and verified;
  • read useful books;
  • inspired by the autobiographical success stories of great traders.

We hope that you also worked on psychological stability. In short, everything is ready to start. It remains to deal with the quotation charts. Your earnings depend on them. Rather, from your ability to read them correctly. Do you remember that trading is an analysis of quotes? Well, charts are where they are displayed.

If you are new to the world of trading, there is a lot to learn. And you need to start by analyzing the graph. Let’s say you signed up on the Binarium platform. The first thing you will see after clicking on the “Trade” button is a chart. How does everything work on it? How to decipher it correctly? What types of charts are there and which one to choose? Everything you wanted to know is collected in this article.

What will you see on the graphs?

Different brokers offer different options for assets. Binarium, for example, has dozens of currency pairs. They are chosen by beginners. And rightly so. Why? Because it’s simple. And it’s understandable. And yet, it is quite profitable. Here the truth is volatility. The level of volatility is directly proportional to the experience. No experience – minimal volatility. This is how it works.

Know little about trading and charts? Choose a “calm” couple. This will help you not to waste your money right away. Plus, you will have time to think. You will be able to make decisions for yourself. No market pressure on you.

We are distracted. Let’s go back to the graph. You need to choose a currency pair. Let’s say it’s EUR / USD. What does it mean? Everything is simple and trade-related.

The world’s banks are constantly trading currencies. They buy and sell dollars, euros, yens, etc. Trading data is quotes. They are communicated to brokers by liquidity providers. Those, in turn, show them to you. These are the quotes that you see on the chart.

Do not think that 100 rubles opens the door to a real interbank market! Smallish fish! But you will not be left completely overboard. You can breathe out. Brokers did their best. Fresh quotes will definitely show you. Rates will be based on real interbank data.

Where can I see charts?

We figured out that the quotes come from banks. Nobody hides them. Everyone gets access to them. And this is not a problem on the one hand. On the other hand, this greatly complicates the choice. There are a lot of programs and sites on the net. They all show quotes.

The newbie doesn’t know who to believe. He is literally drawn into a swamp of information. Calm down! The main thing is to maintain control. Yes, there are many providers of quotes. Yes, often the data does not match. But it’s normal. You need to pick a couple of the best charts and work with them. Accept a few thousandths of error and trade in peace.

What are the best charts? Free, at least. With normal quotes and free – as a maximum. Binarium Brokerage Chart, for example. There are other terminal options, but almost all are paid. And those that are free often lie.

learn how to read the graphics of quotations?

Also, it is believed that brokerage charts are weak for analysis. Like, it’s not serious and you can’t make money with them. Don’t believe it. Binarium charts are working. You just need to learn to read them. And they work in the online version and application. Convenient when you need to trade outside the browser.

What are the charts?

Quotes are just numbers. He’s constantly changing. Even more often than once a second. Moreover, they change for each currency pair. Graphs are needed to see the picture. They help to understand what will happen next.

If you plot prices in different periods on the chart, a curve will emerge. This will be the line graph. But in real trading it is rarely used. Why? Because there are more convenient options. The line chart is too primitive. Displaying one price is not enough to make a decision.

Bars are another matter. These are the columns. Visual presentation of information. Shows the minimum and maximum prices. You can select a time period for analysis. Open and close prices can be configured.

One of the best charts for beginners is candlestick charts. Visually, it is similar to bars, but more voluminous. Reflects the same parameters. Price bars show ups and downs. It’s easy to keep track of changes. There is no time binding.

Histograms. Auxiliary graph. Needed to complement the main ones. Too easy to use on its own. Shows the volume of completed trades. By the height of the lines, you can determine the activity of the turnover of the currency pair.

But all this is general information. To place bets and withdraw profits, the charts must be read. Technical analysis – as it is called in the language of traders. Bars, lines and Japanese candlesticks are the most popular charts. We will learn from their example.

How do I read line charts?

Let’s start with linear. As already mentioned, it is the simplest one. The price curve is plotted along the price and time axes. Line – reflection of the quote at the end of the trading period.

The chart is needed to analyze the general trend. Works with time frames from 1 day to 3 months. It can be used in conjunction with other tools.

How to read bars?

Bar chart is the choice of traders from Europe, America and Asia. Slightly more informative than linear. In addition to the closing price, it displays the high and low prices. Already good, but still not perfect. Although the visualization definitely deserves attention. Vertical bars – define borders, serifs – depend on location. The right ones show the closing price. The left ones are the opening price.

The chart is easy to use. Move the mouse and “write off” the numbers. Bars show changes in quotes for a certain time (timeframe). The time period can be customized. For a start, it is optimal – 5-15 minutes. Each time frame is a new line.

Watch out for serifs if you’ve chosen bars. Don’t miss the levels. From them, you can predict the direction. For example, the right side is higher than the left – the price will rise. On the contrary, it will fall.

Bars are not the best, but bearable option for analysis. Learn to work with them and control price reversals.

Bars work well in news trading strategies. The columns are compressed before the events. This means that the market is calm. Rising bars are a reason to prepare for a price reversal.

Learning to analyze with Japanese candlesticks

Japanese candlesticks are not the holy grail, but something. Almost all experienced traders use them. The candlestick chart was trusted back in the 17th century, when rice was weighed. The popularity of Japanese candlesticks continues to grow today. Everyone understands that this is a real way to make a profit.

What does the graph look like? Candles are a bit like bars. The bodies are voluminous, with shadows. Each candle is a change in the quote. Naturally, taking into account the time period. You set it up yourself (chart timeframe).

Analyzing the graph is easy. Everything is almost the same as with bars. It’s just easier to read candles. Contrasting colors of elements – protection from errors. Price growth is white. The fall is black. This is if you do not change the basic settings. But this is optional. You can set any colors you like.

Go ahead. Learn to read Japanese candles. Remember the names of the elements and designations:

  • initial price – open (О);
  • final price – close ©;
  • the minimum value is low (L);
  • the maximum value is high (H).

The candlestick itself and its shadow depend on the level of fluctuations in the market. The names of the models are different and unusual. For example, this is the “morning star” or “tombstone”. Each – reflects a certain situation, signal. It should be noticed and used for analysis.

The signal is associated with a trend. Reversal or continuation are the most important conditions. Long shadows in the direction of the minimum – an upward reversal. Shadows towards the maximum – downward reversal.

How do I use the chart?

Now you know about the main types of charts. Perhaps you already know how to read them. What’s next? You need to practice. The first deal is like the first kiss. Responsible and exciting!

Scheme:

  1. Enter the trading platform.
  2. Choose a currency pair, chart type.
  3. You can also open it on a live chart.
  4. Set the time frames the same. For example, 15 minutes. That is, each new element will appear in 15 minutes.
  5. Keep track of two charts at the same time.

What’s next? Analyze both charts and set the expiration. It is equal to the timeframe * 4. That is, with a timeframe of 15, the expiration is 60 minutes. The most convenient and normal value for beginners. Over time, you will find your own values. Understanding will come with experience.

Next is the solution. You need to decide what will happen to the quote in an hour. Have you decided? Click on the “Up” or “Down” buttons. In an hour, if the forecast is correct, you will receive the money.

This, in fact, is all. This is how charts work. This is a simple analysis. There is nothing complicated in trading at all, if you delve into it. Learn to predict, you will earn. And the charts will help. It is a simple and effective tool. Even for beginners.

Pros and Cons of Charts

To make it easier for you to choose, a little comparative data. What’s good and what to look for.

Chart titleProsCons
LinearSimple and straightforward.

Detailed visualization.

Convenient overview of elements.

Less risk of getting false data.

Combined with the Scorpio strategy.

Little information to make a decision.
BarsSimple and convenient visualization.

Range of useful data.

Difficulties in determining the price in a limited timeframe.
Japanese candlesticksCorrect forecasts in short time frames.

Obvious price movements.

Completeness of information and self-sufficiency (work without auxiliary tools).

Difficulty finding shapes due to the volumetric elements.

Exotic charts

Haven’t you heard? Someday it will be their turn. And when this happens it would be nice to be able to work with them. We figured out that the price movement is shown by bars, candles and lines. This is a classic. You need to start with it. A description of these graphs is available on each related site.

Exotic is another matter. A rare but useful occurrence. For example, Renko and Heikin Ashi. It is unlikely that you will find information about them. It’s not that the schedules aren’t working. They are just rarely used. Mostly due to misunderstandings. But this is easy to fix.

So, Heikin Ashi are modified Japanese candlesticks. They differ from the prototype in structure:

  1. Open – the sum of the previous close and the opening level, divided by 2.
  2. Close – the same amount, plus the high and low of the current candle, divided by 4.
  3. Above shadow – the close or open level of the real candle, the larger of the high;
  4. Lower – the minimum of the close or open of a real candle.

At first glance, it may seem difficult. But the main thing is that you don’t have to build anything. It is enough to remember the figures and the principles of their use.

The Heiken Ashi chart helps you track trends. Long candlesticks – indicate a powerful trend. Decaying – decreasing. Small candles with shadows on the sides are a sign of an imminent reversal.

In practice, we recommend following simple guidelines:

  1. Open a trade for more than one candle.
  2. Use oscillators for filtering.
  3. Forget about high time frames for a while.

It makes no sense to talk a lot about Renko. You need to grow up to be a professional. Volumes and time are not included in it. From the same series for the pros – Kagi. Created at the end of the 19th century in Japan. Requires immersion and trading experience.

Time frames

Now you know how to read charts. We even learned about the exotic for professionals. But this is still not enough. You need to learn how to choose timeframes. They depend on expiration. By default, the trade length of 3-5 candles is the norm. That is, on average, TF is M4. This must be remembered.

The variant with two graphs is described above. In this case, you can play a little with time frames. Let the first one be set according to rule M4. The second is open on the older one. This way you will not miss the global trend and reversal.

Helpful tips

You can learn how to read graphs. For this to give a result, we need more oscillators and indicators. The purpose of their use is to determine the current trend. Which is better? Bollinger Bands are working normally. The moving average is in demand.

Oscillators – Stochastic and RSI. You can try several and choose. For this, Binarium, for example, has a demo account. There is no need to risk your money. But you can learn how to build lines of support, resistance, etc.

Everything that is described here should help you get started. Less theory and more practice. This information is enough to outline a plan of action. It will be easier further. Trading is practice. The more it is, the more experience and higher earnings.

TRADE OPTIONS

“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”