Lesson 11: Bars and Candles and Charts in forex trading

– [Nate] Three, two. – Bars, candles, and charts. Welcome, everybody, I’m Rob Booker. Welcome back to our FX Trading 101 lesson, sponsored by Forest Park FX. Bars, candles, and charts. Before we get into anything else, and we are gonna do a lot
more chart stuff later on, I wanna, before we go any further, it’s gonna be important that we just talk about these basic three things. Bars and candles are
the way that generally traders will express
price on their charts, and we’ll take a look at
that in just a second. And charts are the place
where we express that. Most currency traders
are technical traders, which means we take a
look at these charts, we take a look at the screen,
and when we take a look at the screen we, I
don’t want it to be blue, alright great. So, most traders will
pull up a chart like this and maybe they will color the background. I think we have a black
background one too don’t we Nate? – [Nate] We should yes. – We should have one
but I don’t where it is. Well, we’re gonna take a look at it here. This is a chart that we’re
looking at right now. And on this chart are candles, which we’re gonna look at
and I made the colors wrong and I want to change
this before we proceed. There we go, okay excellente. This is a chart, I think you
probably already knew that but I was just making sure. (chuckling) This is the canvas on
which price is painted. And from which we make our decisions. Most traders are technical. Some traders don’t look
at any of these charts and simply focus on the quotes or economic stuff or whatever else. But 99% of all FX traders are gonna be technical analysts and technical traders. Meaning they’re gonna look at a chart and they’re gonna size
things up on the chart. Your charts in the world
of currency trading are going to be made up of bars or candles in most cases. Candles look like this. That’s what a candle looks like. It’ll have a body in the middle and then a shadow or a wick on either end. You can have candles with small bodies or no bodies and long wicks. Or you can have candles with long bodies and almost no wicks or anything on them. You can have candles that
are darkly colored inside which means they’ve been moving down. Or you can have candles with light colors on the inside which generally mean that price has been going up. If we go back over here to our charts, you an see this pretty good. The black backgrounds with no interior, those have been moving up
and the white background or the filled in candles which are white in this case, have been moving down. And your charts are going to be freely alterable by you. Meta Trader allows you
to change the colors of these things. You can have yellow, white, green, all kinds of different colors. You could change the background
of your charts to be dark. They say that darker
background charts are easier on your eyes when you’re looking at charts for long periods of time. That’s just a little side note. Now some traders don’t
like to use candles, they like to use bars. And bars are going to look like this. So I’ll move up here a little bit. And a bar is gonna look like this. It’s gonna have an open and a close area and wicks or shadows or
whatever they’re called. And I don’t use these at all. But if you like to or
want to you can use those. They either end up or they end down and so forth and so on and whatever else. On a bar chart, the little
nudge that sticks out to the right is the closing price. The little nudge that
sticks out to the left is the open price. And then this is the low that it reached and that’s the high that it reached. Those are bars and candles. We’re gonna talk a lot
more about analyzing stuff or taking a look at these things later on. But that’s what a bar or a candle is. Now a bar or a candle on a chart, represents a certain,
excuse me, sorry about that. A certain period of time. A certain period of time. So each candle, I use
candles, but I don’t care I don’t care if you do like
them or don’t like them. Each candle on your chart will represent one period of time. It could represent one minute, 1M or sometimes it looks like M1. It could represent one hour or hour one. Some people will call
that a 60 minute chart. It could represent one
day or on some charts D1 or one month, one minute, ten minutes, five minutes, and so on. Inside of Meta Trader
which is the largest, the most widely used platform. At the top of the charts
in this area up here, we could change from M1 to M5, one minute to five minute. That means that every single one of these candles represents five minutes of time. Or we could switch it
to a one hour and every single one of these candles
represents one hour of time. Or we could switch it to a one week chart and each one of these bars or candles represents one week of time. Alright, that’s just
the basics on loadin’ up your charts and lookin’
at bars and candles. And it’s gonna be important
’cause in the next lesson we’re gonna talk about long-term versus short-term trading. I’ve been short all my life. Thank you to Forest Park FX
for sponsoring these videos. If you’re interested in FX trading, contact Forest Park FX
to receive cash back rebates on every trade you place and open a trading account. You can go to forestparkfx.com. Remember ForX trading carries
a significant risk of loss. Terms and conditions will apply. Thanks for being here everybody. We’ll see you in the next lesson.

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