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Lesson 3 of 8
Charts & Candlesticks
Forex Chart Basics
Charts in forex work the same as other markets. Candlesticks show open, high, low, close for each period.
Candlestick Colors
- Bullish (Green): Close higher than open - buyers won
- Bearish (Red): Close lower than open - sellers won
Key Candlestick Patterns
Doji
Indecision - open and close nearly equal. Watch for reversal after trend.
Hammer/Hanging Man
Small body, long lower wick. Hammer = bullish after downtrend. Hanging Man = bearish after uptrend.
Engulfing
Large candle engulfs previous small candle. Strong reversal signal.
Pin Bar
Long wick showing rejection of a level. Trade in direction opposite to wick.
Timeframes for Forex
- M1-M15: Scalping (not recommended for beginners)
- H1-H4: Day trading, intraday swings
- D1: Swing trading, daily bias
- W1-MN: Long-term trends, position trading
π‘ Best Practice
Analyze on higher timeframe (D1 or H4) for trend direction. Then use lower timeframe (H1 or M15) for precise entry.
π Key Takeaways
- Review this lesson's material before moving on
- Practice the concepts on a demo account
- Take notes on what you've learned