An Introduction to Forex Charting

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Trading in the Forex Market has become infinitely easier than what it used to be in the earlier days. New and more improved technologies have enabled us to trade with much ease. We can see the price chart move on the high-resolution screens that can provide us with instant feedback about even the most minute changes in the market.

When it comes to choosing a price chart, there are a number of options. The charts are highly customizable. You can choose virtually any color for your chart to make it more distinct, appealing and readable.

You may take the price charts for granted and may not give a second thought about them, but price charts have come a long way since the old days. There were times when price charts were neither convenient nor very user-friendly. 

A Time Before Charts 

The LCD screen was invented only 40 years ago. However, the Forex Market had existed long before the advent of modern technology like screens were invented. The stock market traders and investors had to find a way by which they could determine the stock prices and be in the loop.

In the initial days, traders used the crude method of Ticker Tape system to keep a tab on the Forex charts. 

Ticker Tape was like a prototype of the modern-day pager of the messaging system. It used an electronic communication platform to transmit the messages through a telegraph network.

The system was composed of a device known as the stock ticker. Someone put the paper strip into the stock ticker. The device would then work its magic, interpret the signals that are transmitted through the telegraph network and the print them on the piece of paper in a way that can be read.

As the slip of paper comes out from the other end of the stock ticker, certain alphabetical symbols are printed on it which represent a company’s stock and is followed by the price and volume data. 

The device made a ticking sound when it printed the data on the paper slip which gave the device its name ‘ticker tape”.

The ticker tape was invented in the 1870s. It was the only medium 

through which the traders could get updates about the market movements and the price changes.

It was only after the 1960s when television screens were invented that they slowly started to replace the primitive ticker tape technology. The ticker tapes finally became obsolete in the 1970s.

Floor Traders

Due to the technological developments that took place, the traders no longer had to depend on the outdated ticker tape technology to keep a track of the price changes. Now the electronic screens could display any data change in the prices.

The lives of stock traders had now become much easier. All they had to do was go to the exchange floors, check the screens to know about the price updates, use hand signals or simply yell to place a trade order with the stock brokers. 

This was the beginning of floor trading that is also known as pit trading. In fact, floor trading has a long history and is still in use in almost all exchanges. 

With the internet in the palm of your hands, it is easier than ever to download the charting software of your broker and start trading immediately from the comfort of your home.

A few experts believe that floor traders will become extinct in the near future since there is no need for special trading privileges in the exchange to trade anymore.

With the advent of latest technology, you can simply log in to your computer and start trading. All you need is a good internet connection and you will be good to go.

When it comes to representing the market prices in the charts, there are a number of options. Every chart has a different style with their own set of pros and cons. While some are simple to read, others are more complex.

The appropriate chart configuration and style would depend on the Forex trading strategy that you follow.