How To Easily Understand Forex Charts To Trade XAUUSD Successfully? 

What Forex Charts Tell You?

A forex chart is a price graph that displays historical pricing and volume data for one or more currency pairs. Thus, a forex chart graphically illustrates a currency’s historical performance across several time frames and technical patterns, indicators, and overlays.

Price is often represented on the vertical y-axis, whereas time is plotted on the horizontal x-axis. You can specify how regularly new data is plotted to a chart on trading platforms by selecting a timeframe spanning from tick-by-tick to a whole month.

One of the first things you’ll need to do if you want to start trading is to learn how to read forex charts and trading tips. To help you get started, we describe the simplest techniques to read Forex charts for trading on XAUUSD.

Decoding Forex Charts or Trading XAU/USD 

#1. Predict Future Price Movements With Indicators 

A solid set of ready indicators can be used for sophisticated technical analysis. A wide variety of fundamental data elements can also be conveniently incorporated into charting research. Analyses can be performed using the symmetrical triangle. It is a straightforward chart pattern that signals a period of consolidation preceding a price breakout. 

Symmetrical triangles are formed by intersecting two trend lines with comparable slopes but moving in opposite directions. Price movement on the pairs becomes tighter as consolidation occurs, giving a prospective business opportunity for a breakout. When other indicators point to a possible price breakout, the symmetrical triangle can provide additional confirmation and boost confidence in placing an order on XAU/USD.

#2. Use Candlestick Charts

Candlestick charts employ a visual representation of pricing divided into two parts: the body and the wick. These parts come together in the shape of a candle, hence the chart’s name. The wick, represented by a narrow line that runs along the top and bottom of the body, symbolizes the highest and cheapest prices traded within the time frame. The candle’s body, or thicker central portion, displays the open and closing prices for the time frame.

If the open is lower than the close, the bar’s colour will be green, depending on your software’s colour settings. If the ending price is lower than the opening price, the bar will often be red, depending on your software’s colour choices.

#3. Concentrate On Filter Parameters

As XAU/USD continues to trade in a pattern, one of the simplest methods is to spot buy or sell possibilities within the trading pair’s historical highs and lows using the filters. When gold is heading higher, traders might establish a position and target a previous high as their sell price, or vice versa.

As gold trading is a reasonably stable asset, it will likely return to past highs or lows in the future. This is a low-risk approach aimed at producing some profit from consistent XAU/USD price movement. Also, for better results, customize the filters and conduct periodic searches on the Forex charts.

Though the price of gold is affected by variables other than those that affect the price of traditional forex currencies, a number of the principles for assessing forex currencies remain applicable. Get recommendations, gold signals & gold tips directly from gold trading experts at The Learning Art and see your investments soar in value.