There are many methods used by forex traders to predict the movements of currency pairs. Fundamental traders may read news sources to see how interest rates, economic growth, employment, inflation, and political risk affect the supply and demand for currencies. Technical traders use charting tools and indicators to identify trends and important price points of where to enter and exit the market.

A forex chart is used by traders to conduct a technical analysis, which helps them to make better trading decisions. Forex charts contain real time data and keep traders updated on currency trades. It is possible to make forex trading decisions based on the interpretation of foreign exchange charts. Forex charts help make the difference between forex trading success and failure. It is crucial that a trader knows how to read forex charts, as technical analysis will help them to become aware of new trends, and to make the right decision at the correct time.

A forex chart is a graphical depiction of the price movement of given currency pair. It shows how the exchange rate of currency pair has changed over time. A forex trading chart is basically a chart that plots a currency pair’s price movement over a period of time. Most charts plot time from left to right horizontally and price from bottom to top vertically. The price of the currency pair is usually represented in the form of a line, bar or candlestick.

For forex traders, candlestick charts seem to be the crowd favorite and it’s easy to see why. Compared to a line chart, which shows the price close to close, candlestick charts show four times the amount of information, displaying the close, open, low and high price of a given period. By having this extra information, you can study ‘how’ price has moved over a period of time compared to just seeing where the price closes.

Learning the art of reading forex charts and getting better at it is not enough to be successful in this trade. In fact, it is only half-way in making a sound decision for your investments. By training yourself in fundamental analysis, you'll be better equipped in making good decisions in your investments. Better read up on the latest news about various nations, particularly the one with the currency you have your investment on. Then, just pair these readings with your skill in reading forex charts and you'll make a better investor out of yourself.