If you want to succeed in forex trading, one of the first and most important skills to master is how to read forex charts. These charts are the heartbeat of the currency market — they tell you when to buy, when to sell, and when to sit on your hands.
But for beginners, forex charts can look confusing and intimidating.
In this guide, you’ll learn everything you need to know — in plain English — about how to read and interpret forex charts, even if you’re just starting out.
🧭 What Is a Forex Chart?
A forex chart is a visual representation of how a currency pair moves over time. It shows you the price history of a pair like EUR/USD, GBP/JPY, or USD/JPY — which is key to making smart trading decisions.
Most forex charts show:
Time on the horizontal (X) axis
Price on the vertical (Y) axis
Candlesticks or lines that represent price movement
If you’ve ever looked at a candlestick chart and thought, “What am I looking at?” — you’re not alone.
Let’s break it down.
📊 Types of Forex Charts
There are three main types of forex charts:
1. Line Chart
The most basic type of chart — connects the closing prices of a pair over a time period. It’s good for seeing the big picture but lacks detail.
2. Bar Chart
Displays high, low, open, and close prices for each time frame (also called OHLC). It’s more detailed but harder to read for beginners.
3. Candlestick Chart (Most Popular)
This is what most forex traders use. Each candle shows the open, high, low, and close — and it’s color-coded for easy interpretation:
Green or white candle = price went up
Red or black candle = price went down
Platforms like Deriv and MetaTrader 5 give you instant access to candlestick charts on every forex pair.
📅 Timeframes: Understanding the Market Speed
Charts come in different timeframes, from 1-minute to monthly.
M1, M5, M15 – great for scalping (short-term trades)
H1, H4 – for intraday and swing traders
Daily, Weekly – for longer-term trend analysis
📌 A single candlestick on the H4 chart shows 4 hours’ worth of price movement.
When using tools like VTM AI, the system automatically analyzes multiple timeframes to identify structure and trend direction.
🔍 How to Read Candlesticks
Each candlestick has:
Open: where the price started at the beginning of the period
Close: where the price ended
High: the highest price during that period
Low: the lowest price during that period
A long body means strong momentum. A small body with long wicks means indecision — often called a doji candle.
Understanding candlestick behavior is key to spotting reversals, breakouts, or fakeouts.
📈 Support and Resistance Zones
When reading charts, always look for support and resistance:
Support: A price level where the market tends to bounce up
Resistance: A price level where price usually reverses down
Marking these zones helps you know where to enter and exit trades.
The good news? VTM AI automatically detects and marks key support and resistance zones on your chart — saving you time and reducing error.
⚙️ Indicators That Help with Chart Reading
Once you understand raw price action, indicators can help confirm your decisions. Some common ones include:
Moving Averages: Smooth out price and show trends
RSI: Tells if a pair is overbought or oversold
MACD: Measures momentum and trend direction
The key is to avoid overloading your chart. Keep it clean and focused on structure, not noise.
🧠 Chart Patterns to Know
These patterns often signal market movement:
Double Top/Bottom: Trend reversal pattern
Head and Shoulders: Reversal with a defined neckline
Triangles: Continuation or breakout signals
Chart patterns are easier to spot over time, especially with a clean chart and solid structure — something VTM AI is designed to recognize and trade on your behalf.
⚠️ Mistakes to Avoid When Reading Charts
Ignoring the trend
Zooming in too much on lower timeframes
Using too many indicators
Trading based on one candle or pattern alone
Not considering the bigger picture
Always remember: the chart tells a story — your job is to read it calmly and logically, not emotionally.
🛠 Recommended Tools for Beginners
Broker: Deriv — great for starting with a demo or live account
Strategy Assistant: VTM AI — a smart trading system that reads chart structure, zones, and trends for you
These two together make forex trading far less intimidating.
✅ Final Thoughts
Learning to read forex charts is not as complicated as it looks. With time, it becomes second nature.
Whether you’re trading manually or using automation like VTM AI, chart literacy is your foundation for consistent profit.
👉 Ready to practice what you’ve learned?
Open a demo or real account now with Deriv and let the market be your teacher.