How to Read Chart for Beginner Traders
Gold charts are used to illustrate the price movement of a instrument. This price movement is plotted on a chart & traders can analyze the chart patterns on the chart so as to determine when to open a buy trade or a sell trade.
Gold charts can be used by traders to gain a better understanding of the price movement based on analyzing past price data - this price data analysis is then used by technical analysis traders to predict the next likely future price direction.
How to Get Charts
Gold charts are provided for on the trading softwares such as the MT4 & MT5 platforms.
To get charts in MT4 and MT5 softwares:
MT4 - To display the chart on MT4 software follow the step below:
- Go to the Market Watch on the Top Right of the MetaTrader 4 Platform
- Select The XAUUSD that you want to trade
- Right-Click on this Gold
- From the Pop Up Menu Choose Open Chart option to open the chart on MetaTrader 4
MetaTrader 5 - To display the chart in MT5 software follow the step below:
- Go to the Market Watch on the Top Right of the MT5 Platform
- Select The XAUUSD that you want to trade
- Right-Click on this Gold
- From the Pop Up Menu Choose Open Chart option to open the chart on MetaTrader 5
How to Analyze Charts
Gold charts price movements can be interpreted using trend analysis & gold patterns analysis.
Gold trend analysis will determine if the prices are moving in an upward trend or a down-wards trend.
Gold chart patterns will try to identify commonly repeating chart patterns so as to try and determine what is the next likely price direction based on the technical analysis of these commonly repeating price patterns.
The three most commonly used charts are:
Line Charts - gold line chart is a line connecting one closing price & the next. Line chart does not give much information about price movement compared to other chart types.
Bar Charts - gold bar charts show open, high, low and close of price - OHCL. Bar charts provide traders with a little more information than line charts.
Within the bar the opening price, the high price, the low price & closing price are represented.
The vertical line of a bar chart shows the price range for a particular price period the top of this vertical bar shows the high of the price while the bottom of this vertical bar shows the low of the price, two horizontal lines one to the left shows opening price & one on the right shows the closing price.
Candle Charts - candlestick charts show the opening price, the high price, the low price and closing price.
The opening & closing price are used to detect when a candle is bullish or bearish.
Bullish candle is when the close price is higher than the open price.
Bearish candle is when gold close price is lower than the open price.
How to Read Chart for Beginner Traders - How to Interpret Charts
