Financial Knowledge

Teach you to understand the foreign exchange trend chart!

June 17, 2020

Just like the stock market risk, foreign exchange risk also exists. Just like the stock market analysis chart, foreign exchange also has its own graphic analysis tool, which is the foreign exchange trend chart, which reflects the changes in the price of the foreign exchange market. As the foreign exchange volatility is the same as the stock market, the foreign exchange trend chart can be divided into real-time chart, minute chart, hour chart, daily chart, weekly chart and monthly chart according to the time.

Different trend charts have their unique behavior characteristics. Without mastering these characteristics, the tool of technical analysis will lose its significance. Many foreign exchange investors are used to looking at the real-time chart of the foreign exchange trend chart to make orders. When the real-time chart moves, they jump into the market. When someone buys at the planned price, the real-time chart drops rapidly, and they cut down the orders in a hurry. This is the performance of not knowing the characteristics of the real-time chart.

The main function of real-time chart is only to accurately record the price. Its trend direction will change at any time. Under normal circumstances, the fluctuation of real-time graph is relatively small.

The change of foreign exchange price is basically fluctuating. In the rising waves, there will be many small waves that fall in between. Therefore, when the hourly chart is basically on the rise, the price of the five minute chart may fall, while the real-time chart may rise and fall many times in five minutes. Therefore, experienced investors will not let themselves be led by the real-time chart. Some investors, after placing orders according to the plan, still consciously avoid looking at the real-time chart to avoid disturbing the mood.

After a careful study of real-time graph, we can find that it has not only the characteristics of accuracy and changeability, but also the characteristics of sensitivity. In addition, when the order is entered according to the plan, but the price of the resistance point is not accurate, and there are dozens of losses, you can closely observe the real-time chart. If there is a new breakthrough in the price, you should consider cutting down the loss order. Compared with the sensitive and changeable real-time chart, the five minute chart is much more calm. The characteristic of the five minute chart is that it is more sensitive to the price of the resistance point and the support point, and it is suitable for grasping the opportunity of entering and leaving orders accurately.

Strictly speaking, many methods of technical analysis are used on the five minute chart, and its reliability needs a big discount, because the five minute chart is only sensitive to the resistance point and support point, and its fluctuation usually has no meaning of trend direction. The strength of the resistance point, which depends on the 5-minute graph only, is usually small.

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