Question 1

What does a forex chart actually show?

Accepted Answer

A forex chart plots the exchange rate of one currency against another over time. Each candle summarises a slice of that period with four prices: where it opened, the highest and lowest it traded, and where it closed. The body spans open to close and the wicks mark the extremes, so a long wick tells you a level was tested and rejected within the period.

Question 2

Which timeframe should I trade?

Accepted Answer

The timeframe should match how long you intend to hold. Scalpers work on 1- to 15-minute candles, intraday traders on the 1-hour, and swing traders on the 4-hour and daily. Lower timeframes generate more signals but a far worse signal-to-noise ratio, and your transaction costs are paid on every one of them. Most traders read a higher timeframe for direction and drop down only to time the entry.

Question 3

Why do charts differ slightly between brokers?

Accepted Answer

Because FX has no central exchange and no consolidated tape. Every broker builds its feed from its own pool of liquidity providers, so opens, closes, highs and lows vary a little between platforms — and candles can differ more around thin periods such as the daily rollover. Charts are also usually drawn from bid prices, meaning your buy fills at the ask are slightly above what the candle shows.

Question 4

What is the difference between candlesticks, Heikin Ashi and line charts?

Accepted Answer

Candlesticks show the true open, high, low and close of each period. Heikin Ashi averages consecutive periods together, which smooths noise and makes trends easier to read at the cost of no longer showing real prices — never take entry levels from it. A line chart connects closing prices only, which strips out intra-period noise and is useful for seeing structure clearly.

Question 5

Is the volume on a forex chart real volume?

Accepted Answer

No. Without a central exchange there is no true traded volume in spot FX, so platforms display tick volume — the number of price changes in the period — as a proxy. It correlates well with real activity and is fine for comparing one period against another, but it is not the notional amount traded. For genuine volume, traders look at CME FX futures.

Question 6

Do indicators predict where price is going?

Accepted Answer

No. Every standard indicator is a transformation of past price, so it describes what has already happened rather than what will. Moving averages, RSI and MACD are useful for framing trend, momentum and stretch in a consistent way, but stacking several of them mostly restates the same information. Indicators support a decision; they do not make one.

Forex Charts

EUR/USD

Technical Analysis

Reading Forex Charts

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