Before entering Forex market you have to make couple of major decisions about the kind of trader you want to be and what are your objectives as a forex trader. Foreign exchange trades 24 hours a day during the working days. It is never closed except for weekends and one of the major decisions you will have to make is which time-frame suits you best.

What are your options? There are 1-minute, 5-minute, 15-minute, 1-hour, daily, weekly, monthly, or yearly charts and the kind of chart you choose will largely influence your trading results. The time frame you choose should fit your character and personality. It is not something you can skip and decide later on. This one should be on the top of your forex to-do list! Read more...

The name speaks for itself – forex line chart consists of data points which represent closing prices and are connected by lines. When the chart is complete for a specific period of time it looks simply like a high school graph you used to make. Forex line chart is the basic type of chart and gives a trader a chance to observe the price changes.

Bar chart unfortunately has nothing to do with beer or snooker. However compared to line chart that only shows closing price bar chart also shows an opening price, highest price and lowest price all at the same time. So instead of a continuous line you get short vertical "bars" with little left and right "tails". The left tail shows the opening price and the right tail represents the closing price. Bar Chart is often called OHLC which stands for Open High Low Chart.

So, just so summarize:

Open = Opening price of the period represented by tiny horizontal tail on the left side

High = Highest price of the period represented by the TOP of the whole vertical bar
Low = Lowest price of the period represented by the BOTTOM of the whole vertical bar
Close = Closing price of the period represented by tiny horizontal tail on the right side

Candlestick charts have exactly the same "features" as a bar chart with open, high, low and close prices within one vertical bar, except that the bar is more like a larger block which is down right in the middle of the vertical line and it shows the range of opening and closing prices. Colors are also involved in Candlestick charts. 

If the block is green that tells us that the closing price is higher than the opening price (the price is moving uptrend/bullish).

If the block is red that tells us that the closing price is lower than the opening price (the price is moving downtrend/bearish)

Candlestick charts are most favored among forex traders because of its colors! It is easier to focus on something and remember it better if it has colors (true fact!).