The way to modify and prepare Forex charts is partly dependent on the program you are using, but there are also some features that you can adapt to suit your personal preferences. There are some items that you can configure to make it easy to read and understand graphs. The remainder of the initialization process will be mainly based on the system and includes the addition of certain indicators on the graph. Some trading programs, such as MetaTrader, allow storing custom graph settings, such as templates, which can be loaded later on the chart of any currency pair and on any time frame. Chart templates save a lot of the time and effort of a Forex trader.
The first step is to open a chart window for the currency pair you want and then choose the desired time frame. If you are a newcomer to the forex trading world, the term frame here refers to the time length of each candle on the chart. For example, the one hour frame on the GBP / JPY pair indicates that each candle represents the pair’s movement within a one hour period. Changing the timeframe differs from enlarging or reducing the graph, whose mission is to zoom in or out the size of the candles themselves. If you want to see the pair moving extensively, you can minimize the graph. If you are looking for details, you can enlarge the graph window without having to adjust the time frame.
It is also useful to change the chart colors to suit your preferences, and you can also adjust the candle display settings. Some people prefer seeing candles in a specific shape, while others see these shapes as distracting. However, it is always a good idea to set the trading program in order for the chart to display the opening, top, bottom and closing levels for each candle. You can set the graph settings so that the bullish candles are green and the bearish reds (or any combination of colors you prefer), as this will help you distinguish the price movement with one look. You can also change the background color to match the candle colors and your personal preferences.
After completing these basic settings, you can switch to placing Forex indicators on the chart, such as moving averages, stochastic oscillators, MACD and others. Do not place more indicators on the chart than you need to, because reducing the density of the displayed elements will help you avoid contradictory signals due to the multiplicity and different indicators. The main goal of the trading system or method is to search for the simplest combination of indicators that can be used to predict the next price trend. You can count on fundamental analysis if you are able to interpret economic indicators, or alternatively you can use price models. Regardless of the way you settle down, you must test it carefully before applying to a live account.
You can save graph settings (including colors, indicators, and other settings) as a template in the MetaTrader platform by clicking on the template icon in the top-top corner (the window appears as small size charts). If you right-click on the graph, a drop-down menu appears where you can choose a template -> Save Template to save your templates and use them at a later time. You can then use the same graph settings for any currency pair and for any time frame by clicking on the drop-down menu and choosing the desired template from the list.
The concept of pending orders may seem somewhat complicated for new traders, and it may not be clear to somehow they are used or even the reason for their use in the first place compared to standard trading orders. Pending orders help automate trading operations while staying in the market without the need to spend long periods in front of the Forex platform. There are four main types of pending orders that can be divided into two main groups (each of which are the most common orders):
Buy the limit Use this order if you want to buy the currency pair (open a trading position) at a level located below the current price. For example, let’s assume that the EURUSD pair is currently trading at 1.2378 and you thought it would fall to 1.2300 before it climbed again. If you want to place a purchase order that is automatically activated once the price reaches 1.2300, then you will have to use the pending limit purchase order, which allows entering into the trade at a price better than the current price.
Sell limit is to be used if you want to sell the currency pair (open a sell position) at a level higher than the current price. For example, if the GBP pair is currently trading at 1.4531 and you think that if it rises to 1.4700 it will bounce lower after touching this level. In this case, you can use the pending limit sell order if you want the brokerage firm to open a short position for you once the price reaches 1.4700. As with the limit purchase order, the limit sell order aims to enter the trade at a price better than the price currently available in the market.
A pending purchase is a pending order to buy a currency pair (open a buy position) at a price above the current price. For example, if the Yen pair is currently trading at 92.46 and you think that reaching the 92.55 level will trigger a new bullish trend (for example as a result of breaking an important resistance level). In this case you can use the pending buy order if you want to open a long position automatically once the price reaches the 92.55 level.
A Sell Sell Spread is a type of pending order that is used to sell a currency pair (open a sell position) at a level below the current price.