How to Read Futures Market Graphs for Beginners
Wiki Article
Futures graphs can seem overwhelming to beginners due to the different terminologies, numbers, and patterns involved 해외선물. However, grasping these graphs is essential for trading successfully in the futures market. Here is a detailed guide for beginners to read futures market charts:
Understand the Basics:
Chart Type: There are several types of graphs, like line charts, bar charts, and candlestick charts. Most traders prefer candlestick charts because they provide more information than line or bar charts.
Time Frame: The time frame of the chart can differ from minutes. Select the time frame that is right 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 cost 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 rise.
Downtrend: A downtrend is characterized by lesser highs and lesser lows. This is a sign that the market is bearish, and prices are expected to fall.
Sideways Trend: A sideways trend occurs when the market is not bullish nor negative, and prices move within a restricted range.
Understand Candlestick Patterns:
Bullish Candle: A candlestick is considered positive if the closing price is greater than the opening price. The body of the candle will be white.
Bearish Candle: A candlestick is considered negative if the closing price is lower 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 almost identical. 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, momentum, instability, and strength of the market.
Some commonly used technical indicators are Moving Averages (MA), 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 more info 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 analyzing futures market charts.