Here is a chart from the charting platform from TradingView, It's one of the more popular charting platforms:
But It's not the only one, you have stuff like MT4, MT5, NinjaTrader, and many more…
So, I will explain to you how to read a Forex chart.
How to read a Forex Chart
If you want to read a Forex chart...
One thing you'll note is that the price on the right side of the chart.
This basically tells you what is the current price of this market:
How to interpret Bid and Ask in Forex
If you studied the earlier lesson, you'll know the market always has two prices. Number one is the bid (Left Side) and number two is the ask (Right Side):
So, as you can see, the bid is at 1.3127
And the ask is 1.3129
The bid is the price that you want to sell it.
The ask is the price that you want to buy it.
Let's say you want to buy NZD/USD.
The asking price is 0.7322 and the bid is 0.7321
Let's say you long at New Zealand dollar is 0.7322, and you sell it at 0.7330
You make eight pips, right?
If you've entered the trade and made 8 pips, and you are trading with one standard lot.
This will be about $80 profit.
Because one standard lot with one pip movement is $10.
If you are trading one mini lot, it will be $8.
If you are trading one micro lot, it would be 80 cents.
Next thing is the different type of orders…
How to execute trades in Tradingview
If you want to click buy using the Market Order (Left), you will enter the trade right now at this asking price.
If you don't want to pay the current market price, you can set a limit order (Middle) to get it at a cheaper price if the market does come to your level.
If you want to trade breakouts, you can set the stop order (Right) that if the market hits the level, it would get you into the trade.
And another order is a take profit order.
Let's say you buy some Apple shares at 100 bucks, and you have a take profit order at $120.
What this means, is that if you go long at $100 and it goes up to $120, which is your take profit level, you would exit at this price at $120, excluding any slippage.
So, this is what we mean by a take profit level.
If you have a take profit you set at a higher level, and if the market moves in your favor and hits that level, you will be taken off the trade.
With that said...
I have come to the end of this topic, and I will see you in the next.