How Do I Read Chart Movement?

How to Read Price Movements

To predict & fore cast future price movement traders will use historical price data.

Traders will use charts to analyze the historical price data.

From the charts - traders can search for patterns or candles patterns that commonly form on charts - these patterns form repeatedly on charts and are used to analyze price movement based on the specific xauusd setup that's forming on the price.

The xauusd setup that is forming on the price will determine the type of xauusd market analysis and from the market analysis traders then will generate signals that will predict the next likely price direction.

Traders can also use trend lines to predict next likely price movement based on the trendline direction. The trend line is used to spot trends that prices are moving within:

If an upward trend-line forms then prices will be moving within an upward trend

If a downward trend-line forms then prices will be moving within a down-ward trend

Traders then will use this trend analysis to try & predict the future movement of price. Prices should move in the direction of the trend therefore trader will open trades depending on the direction of current trend.

Traders can use trading analysis indicators to try and predict future price movement. Indicators are xauusd tools which perform math calculations depending on price data and these indicators can then be used by traders to calculate and predict the next likely price direction. For example indicators will be used to calculate the general movement of price whether upward or downwards.

For examples the MA indicator calculate the average price movement of prices depending on particular price periods & then this indicator draws the price movement either moving upward or heading down & this calculation is based on the price movement.

Another example of a indicator is RSI indicator which calculates if prices are generally closing higher than where it is that they opened or closing lower than where it is that they opened - and based on this RSI indicator traders can open trade transactions based on if RSI portrays prices are closing higher than where they opened or either shows that prices are closing lower than where they opened. Traders can then use the indicators signals to predict the next likely price direction.

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