How Do I Interpret a Chart for New Traders
Reading & interpreting a chart is an important skill for beginner traders to learn. There are a few key things that beginners should learn first before starting to trade the market.
Identifying Trends on Charts
Beginners will need to learn how to identify trend on the chart before trading with these charts.
Trend is the most widely used technical analysis concept used by traders. Traders will first determine the trend direction, then after determining this trend direction the traders will open trade transactions in the direction of the trend.
Trends on the charts can be identified using trend lines. Drawing trend-lines on the chart will show the general trend direction of market whether upwards or downwards.
Determine Support & Resistance Zones on Charts
Beginners will also need to learn how to determine gold support and resistance zones on the price charts.
A resistance level on the price acts like a ceiling for the price and this resistance level prevents price from moving upwards past this level.
A support level acts as a floor for the price and this support level prevents price from moving lower below this level.
Using Gold Analysis Tools & Technical Indicators
Beginners can also learn how to interpret price action movement on the charts using indicators.
Indicators are trading tools that are used on the charts to help figure out the direction of the trend as well as to calculate the strength of the current trend.
Traders will use indicators to generate signals & determine when to open buy or gold sell trades.
Identifying Gold Setup Patterns
Patterns can also be used by novice traders to try and predict the next likely trend direction.
Chart patterns are used in technical analysis studies and beginner traders should learn about chart patterns & learn how to identify these chart patterns, how to interpret these chart patterns & how trade charts using these chart setups.
Beginner traders should learn how to trade continuation charts patterns and reversal setups.
Continuation chart patterns include wedges, pennants & rectangles, ascending triangles and descending triangles patterns. These continuation chart patterns signal that a trend is likely to continue after these continuation setups are formed on the chart.
Reversal chart patterns include double top, double bottoms, head and shoulders, reverse head & shoulders chart patterns. These reversal chart patterns signal that a trend is likely to reverse after these reversal chart setups are formed on the chart
How Do I Analyze a Chart for New Traders
