Understanding Futures Charts for Newbies
Wiki Article
Futures charts can seem intimidating to beginners due to the different terms, numbers, and trends involved 해외선물. However, comprehending these graphs is essential for trading in the futures market. Here is a detailed manual for beginners to read futures market charts:
Understand the Basics:
Chart Type: There are several types of charts, like line charts, bar charts, and candlestick charts. Most investors prefer candlestick charts because they give more information than line charts.
Time Frame: The time frame of the chart can change from hours, days. Select the time frame that is suitable for your trading style. For example, day traders may use a 5-minute chart, while long-term traders may use daily or weekly charts.
Price and Volume: Price refers to the price of the futures contract, while volume refers to the number of contracts traded in a specific time period.
Identify Trends:
Uptrend: An uptrend is characterized by higher highs and greater lows. This is a sign that the market is positive, and prices are expected to go up.
Downtrend: A downtrend is characterized by lower highs and lower lows. This is a sign that the market is bearish, and prices are expected to drop.
Sideways Trend: A sideways trend occurs when the market is not positive nor bearish, and prices move within a narrow range.
Understand Candlestick Patterns:
Bullish Candle: A candlestick is considered bullish if the closing price is greater than the opening price. The body of the candle will be green.
Bearish Candle: A candlestick is considered negative if the closing price is less than the opening price. The body of the candle will be black.
Doji: A Doji occurs when the opening and closing prices are the same or very close. It signifies indecision in the market.
There are various other candlestick patterns like hammer, shooting star, engulfing, etc., which indicate market sentiment.
Use Technical Indicators:
Technical indicators are mathematical calculations based on price and volume data. They help in identifying motions, force, instability, and strength of the market.
Some commonly used technical indicators are Moving Averages (MA), Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), Bollinger Bands, etc.
Analyze Price Patterns:
Price patterns like triangles, flags, head and shoulders, etc., can provide clues about the future direction of the market.
Understand Support and Resistance Levels:
Support Level: This is the price level at which buyers tend to enter the market, preventing the price from falling further.
Resistance Level: This is the price level at which sellers tend to enter the market, preventing the price from rising further.
Support and resistance levels are crucial for making entry and exit decisions.
Remember, while reading futures market charts, it is essential to consider external factors like economic data, geopolitical events, and other market news that can influence prices. Additionally, practice and experience are key to becoming proficient in reading and website analyzing futures market charts.