Forget Foreign Currency Exchange Banks

(A candlestick chart is really all you need)

A good currency exchange chart gives you information on the forex market for the past hour, 30-minute period, or even 5-minute period, it just depends which 4x chart currency trading you choose.

Candlestick charts are my number 1 tool in trading. They give me 100% of the information I need in deciding whether to enter or exit a trade.

Chances are, you’ve never seen a candlestick chart before – or if you have, it looked very foreign and complex to you. It’s really not – I promise. And they are goldmines of information once you learn how to use them correctly.

The chart itself is set up like a normal line or bar chart –the time is along the horizontal axis and the price is on the vertical axis.

The candles are created within a set period. On a daily chart, one candle will contain information from 24-hours with of forex market activity. On a 1-hour chart each candle contains the information from one hours worth of activity, and the same goes for 15-minute charts, 5-minute charts and 2-minute charts.

The information contained in each candlestick is this: the open, highest price, lowest price and close within that pre-defined time period (daily, one-hour, 15-minute etc.)

How to read the information is like this:

Each candle is made up of a body and a wick (hence the term, “candle”. Generally, you’ll know if the price went up or down in the pre-determined period by the color of the candle. If it’s a dark color (I like red but some prefer black) then the price of that currency went down. If it’s a light color (I like green, but lots of people prefer white) then the currency’s price went up during that period.

The body is made up of the market’s open and close price during that period. If the candle is bearish (ie the market went down and is a dark color) then the top of the body is the market’s open and the bottom of the body is the market’s close. Likewise if the market went up during the period, the bottom of the body will be the market’s open and the top of the candle is the market’s close for the period.

The wicks are very simple. The wick at the top of the candle shows how high the market reached and the wick at the bottom shows how low the market went during that period. This is the same for both bullish and bearish candles.

So that is the information about candlestick charts. You can get candlestick charts from your broker (not foreign currency exchange banks) when you open a demo account or a live account.

Why Foreign Currency Exchange Banks Are Only Good For Your Vacation

Internet-based Forex brokerage firms will offer you the best rate, as well as some very detailed currency trading information that will come in very useful when you want to trade Forex online.

Foreign currency exchange banks are financial institutions that will allow you to exchange money in your currency for another currency. These banks can come in handy when you are traveling to a foreign country. However, if you plan on getting involved in day trading foreign currencies for profit, you should avoid these financial institutions. Here are a few things to consider about using these types of banks and why they are most likely not in your best interest as a Forex trader.

Some people believe that the only way for you to speculate in foreign currencies is to go down to your local foreign currency exchange bank and trade some of your cash for another currency. Many people are unaware that there is an entire Forex exchange that takes place online. If you want to become a successful Forex trader, you are going to have to ignore the foreign currency exchange banks in your area and get online.

Trading foreign currency with a regular bank will provide you with several disadvantages. First of all, it is very inconvenient to have to leave your house and go down to the bank every time that you want to place a trade.

Another disadvantage is that you are not going to get the best exchange rate with this type of transaction. With these types of banks, they are going to charge a premium for providing this service to you. They do not have an ongoing relationship with you as you would with an online Forex broker. This means that they feel like they have to charge you more in transaction fees to make up for it.

Another disadvantage of using this system is that you will have to deal with cash all the time. Every time that you make this type of trade, you will have to provide the bank with cash in order to get currency from another country.

Another problem with pursuing foreign exchange in this manner is that you will have no control over the rate that you get. You are simply going to get whatever is available at the bank at the time that you walk in. With online brokers, you can place limit orders to make sure that you get the price you want.

Before doing business with a foreign currency exchange bank, consider your other options. You should be pleasantly surprised with what you find online.

Related pages:

Leave Foreign Currency Exchange Banks and return to Forex Trading Beginner Homepage