Bar chart, the chart of interval histograms

A bar chart is a graphic representation of the actions of prices using a vertical bar to connect the highest price during a specified period to the lowest price. The markets opening price will be displayed by a horizontal line that is on the left side of the chart and the closing price will be indicated by a horizontal line to the right side. The most widely used time intervals for creating a bar chart is the hour. However, since real time prices are easy to obtain, some people prefer to use smaller time intervals that range from one minute to thirty minutes.

Standard bar charts are a common way for price activity to be displayed on a chart that can be easily read. There are usually four different elements that combine to create a bar chart, the Open, High, Low and Close for any specific trading session or a chosen time period. The user can represent any time frame on the chart from one minute to one month. The entire trading range for the chosen period is indicated by the total vertical height or length of bars on the chart.

Line Chart

All charts are plotted with time on the x-axis and the currency on the y-axis. Each time period displayed on real time charts can range from tick by tick to an interval of an entire week. The tick refers to each individual movement of the pip. This provides market traders with the flexibility of viewing currencies with closer examination while at the same time allowing them to quickly spot market trends that are most suited for time sensitive trading strategies.

A line chart is a graph that displays the value of a particular currency at specific time intervals based upon the current prices. The strength of a line chart comes from the simple design. It's uncluttered and easy to understand and displays the closing price of the currency.

Tick chart

Tick chart has the finest scale - 1 tick (individual quoting of bid and ask prices by market-maker). It is the chart of Bid and Ask quotations which look as columns on the chart of the prices.
The maximum of each separate column is Ask, the minimum of each concrete column is Bid.

As a rule tick chart is not used for the analysis of the market as its scale is so small that does not approach for the technical analysis. However tick charts are effectively used for exact definition of support and resistance levels and also to raise efficiency of purchases and sales, making it on local minima and maxima.

Types of charts

In order to become a successful Forex trader and gain profit you should be aware of reading the charts that is very important and essential factor for any trader.

The advantage of Forex chart before the ones used, for example in stocks daytrading is their easiness for reading and understanding. These charts show the relations between the slow movement of a certain country's economy with daily situation concerning company reports, analysts from Wall Street and the demands of shareholders.

More differences of Forex charts from the ones of the stock market are long-lasting tight ranges of trading and keeping strong trends. Forex market may be volatile as well but even then it's still more stable. There are only few preferred currencies worth trading in FX market unlike thousands of stocks demanding analysis in the stock market.

About technical analysis

The aim of technical analysis is to forecast price trends in future basing on the historical data along with the one of the volume. Technical analysts are sure that any fundamentals and even expectations have affection to exchange rates changing being the factors of the market. The end of the 19th century gave birth to the Dow Theory that used the writings of Charles Dow, who was an editor and co-founder of Dow Jones. Recent decades gave a number of new tools along with the amelioration of the old ones that was caused by the development of computer-based technologies.

There are three suppositions laying at the basis of technical analysis:

     1.    Everything should be considered at the market movement;
     2.    Price movement has a purpose;
     3.    History is to repeat its occasions;

Relying on these statements, technical analysis can be described as the mathematical analyzing of historical data and carrying out price forecasts. Anyone can gain the profit by posing himself in the trend direction (different patterns of price chart that will suit the future market and  price) , from the point of view of technical analyst. In the uptrend situation you should consider a buy decision, whether if the downtrend occurs you should try to sell. Forex Trader should consider technical analysis as a key factor for success. Technical analysis basic overview is historical market prices analysis for the purpose of predicting price trends or having an adequate picture of prices movement in future.

Forexecutor Trading Software

The Forexecutor is a leading real-time currency quote service that delivers continuously updating, time-sensitive currency data over the Internet to the PCs or laptops of active traders and individual investors. The software provides a wide range of tools and services to a growing base of online investors. Included are currency quotes for 50 + currency pairs, professional charts, alerts, research, back testing, a formula engine for developing chart studies and integrated trading with a choice of direct access brokerages and banks. The product offers a full line of add-on products, including popular technical analysis studies, as well as real-time market scanners to pinpoint winning trades.

 

Foreign exchange market

Foreign exchange market (also called Forex of FX to shorten the name) is the oldest market in the world. It is also seen to be the largest one. Being currencies primary market working 24-hours a day, Forex is also the largest market with highest liquidity. If you are new to the FOREX, it is recommended that you find a forex broker to help with your trading strategy and transactions. The dream of many Forex traders is to work with the ideal broker meeting all set forth above requirements. However the ideal broker does not exist. Before a choice of the broker be defined with the moments most basic for you, what qualities of the broker cost at you on the first place.

Why trade Foreign Currencies?

There are many benefits and advantages to trading Forex. Here are just a few reasons why so many people are choosing this market:

• No commissions. No clearing fees, no exchange fees, no government fees, no brokerage fees. Brokers are compensated for their services through something called the bid-ask spread.
• No fixed lot size. In the futures markets, lot or contract sizes are determined by the exchanges. A standard-size contract for silver futures is 5000 ounces. In spot Forex, you determine your own lot size. This allows traders to participate with accounts as small as $250 (although we explain later why a $250 account is a bad idea).
• Low transaction costs. The retail transaction cost (the bid/ask spread) is typically less than 0.1 percent under normal market conditions. At larger dealers, the spread could be as low as .07 percent. Of course this depends on your leverage and all will be explained later.
  
• A 24-hour market. There is no waiting for the opening bell - from Sunday evening to Friday afternoon EST, the Forex market never sleeps. This is awesome for those who want to trade on a part-time basis, because you can choose when you want to trade--morning, noon or night.
• No one can corner the market. The foreign exchange market is so huge and has so many participants that no single entity (not even a central bank) can control the market price for an extended period of time.
• Leverage. For example, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies. Similarly, with $500 dollars, one could trade with $100,000 dollars and so on. But leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains.
• High liquidity. Because the Forex Market is so enormous, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will. You are never "stuck" in a trade.
• Free “Demo” accounts, charts, news, and analysis. Most online Forex brokers offer 'demo' accounts to practice trading, along with breaking Forex news and charting services. All free! These are very valuable resources for “poor” and SMART traders who would like to hone their trading skills with 'play' money before opening a live trading account and risking real money.
• “Mini” and “Micro” trading. You would think that getting started as a currency trader would cost a ton of money. The fact is, compared to trading stocks, options or futures, it doesn't. Online Forex brokers offer "mini" and “micro” trading accounts, some with a minimum account deposit of $300 or less. Now we're not saying you should open an account with the bare minimum but it does makes Forex much more accessible to the average (poorer) individual who doesn't have a lot of start-up trading capital.
  

The Forex market (OTC)

The Forex OTC market is by far the biggest and most popular financial market in the world, traded globally by a large number of individuals and organizations. In the OTC market, participants determine who they want to trade with depending on trading conditions, attractiveness of prices and reputation of the trading counterpart.

The chart below shows global foreign exchange activity. The dollar is the most traded currency, being on one side of 89% of all transactions. The Euro’s share is second at 37%, while that of the yen is at 20%.

When can Currencies be traded ?

The spot FX market is unique within the world markets. It’s like a Super Wal-Mart where the market is open 24-hours a day. At any time, somewhere around the worlda financial center is open for business, and banks and other institutions exchange currencies every hour of the day and night with generally only minor gaps on the weekend.

The foreign exchange markets follow the sun around the world, so you can trade late at night or in the morning.

What is a Spot Market?

A spot market is any market that deals in the current price of a financial instrument.

Which Currencies are traded?

The most popular currencies along with their symbols are shown below:

Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency.

What is traded on the Foreign Exchange market?

The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the euro and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY).

Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy.  This is because the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy.

In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country’s economy, compared to the economies of other countries.Unlike other financial markets such as the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.

Until the late 1990's, only the "big guys" could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Forex was originally intended to be used by bankers and large institutions - not by us "little guys". However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us.

All you need to get started is a computer, a high-speed Internet connection, and the information contained within this site.

Forex Resources

The average daily forex trading volume currently exceeds $1.9 trillion. With so much on the line, we’ve put together a list of our favorite 100 forex resources to help you become a knowledgeable forex trader. The following resources were chosen for the quality of information and training tools offered. Although some of these tools are located on commercial sites, you’ll find value in materials produced by professionals. Other sites were chosen for the resources that they offered for a price (like books), but they’re all geared specifically toward the forex trader. The chosen sites are written in the English language, but some individuals, businesses, and organizations are located in areas other than the United States.

What is Forex?

The Foreign Exchange market, also referred to as the "FOREX", "Forex", "Retail forex", "FX", "Spot FX", or just "Spot" is the largest financial market in the world, with a volume of over $3.2 trillion a day. That calculates to 15 times the daily volume of all world’s stock markets combined.