How hard can it be to learn to trade? A forex chart is such a simple thing to read that surely making money by deciding which way the price will go next must be a simple step to success and a step to a piece of the trillions of dollars that are exchanged daily in the spot markets.

Some newcomers might look at a chart and think just that and get into fx trading without further consideration. This approach is however more like taking a bankroll to a casino and throwing it in a slot machine. Chances are that you might win big initially but eventually you will give back all of the winnings and much more if you haven't got a plan.

Setting a forex course for success requires a thorough understanding at reading a trading chart.

The photo below is such a chart. It is a monthly graph containing in this case ten bars of static information and one bar of dynamic information. Each static bar is one months worth of price data. The last bar is not complete until the last day of the month therefore it is considered dynamic.

Eleven bars is eleven month of price data. In the fx monthly chart above the price move was 53 with a low of 118 and a high of 161. The current price on the dynamic bar is set at 143. 

Reading a trading chart will be easier if we take it apart a little more.

Take one of the bars. It consists of a vertical line and of two small horizontal lines. The left side horizontal line is the open price for the month of trading ahead. The horizontal bar on the right is the closing price at the end of the trading month. The vertical bar keeps track of the highs and lows for the month. Once the month is over then the bar is static and all price information is written in stone. The bar will remain on the historical price record for ever. The last bar is dynamic and when looking at a live chart the close price will change whenever a quote changes. This can be very often in volatile trading hours. The open price of the dynamic bar never changes but the high and low point do change when a bid quote or ask quote breaks the existing high and low of the dynamic month.

On the bottom horizontal axis of the trading chart is a time scale and on the vertical axis is a price scale. At the top of the chart there is a six letter symbol.

What does the six letter symbol at the top of a trading chart mean ?

ISO stands for International Organization of Standardization and they are responsible for assigning a code for currencies. The currency code is classed ISO 4217. Each currency in the world is assigned a 3 letter code. In this case GBP and JPY are the Great Britain pound sterling and the Japanese Yen. As a trading pair they are the GBPJPY.

GBPJPY monthly indicates that this is a monthly price chart containing historical price data for the pound as it trades against the yen. The numbers besides it are the prices - high, low, open, close.

So there you have the basics of a monthly forex trading chart.

You now have a basic understanding of reading a trading chart. Setting a forex course for trading success and running your own home based business remains to be done.

How hard can it be to be a successful investor in currency markets ?

You choose a side. You put up your dough. You wait for the price to move into the money (going with your chosen side and above your commission cost) and then you cash out. Rinse. And Repeat.

Seems like such a no brainer doesn't it ?

But most people fail in fx. Why ?

There are too many reasons to explain each one here but mostly it has to do with psychology and with terms like greed and fear. Terms like over leveraging your capital and under assessing your risk. Terms like stop hunting. Falling knives and a thousand other terms.

Running an online home business requires dedication and perseverence. Sure some people get lucky some of the time but long term success takes a firm plan with well defined parameters.

When to enter a trade. When to exit a trade.

Self knowledge also goes a long way in making it past the point of being able to read a trading chart. Self knowledge tells you whether you have the risk aversion to daytrade. Maybe your personality is more in tune with mid term charts such as swing traders use.

Fear not and understand that some people do succeed in their home based investment business.

Eleven months of data and 53 points.

Another word in forex is pip. It is a vague word since it represent something which no one seems to quite be able to pinpoint. I believe it means price increment percentage but when people talk of a pip they usually mean a profit or loss. If one pip is 1/100^th of one point then there would be 5300 pips in 53 points.

If each pip was worth one dollar then 5300 pips in 53 points in 11 months is 5300 dollars.

A professional income from a home based business would certainly require much more. At least 5 dollars per pip would get the trader a middle lower middle class status.

That is just one of the many considerations that the serious forex armed with an ability at reading charts must consider when developing a strategy and setting a course for forex success.

Knowing odds and taking calculated investment risks is about planning and not about luck although a little luck never hurt anyone.