How to Read Futures Market Charts for Beginners
Wiki Article
Futures market graphs can seem overwhelming to newbies due to the various terms, figures, and patterns involved 해외선물. Nevertheless, grasping these charts is vital for trading successfully in the futures market. Here is a step-by-step manual for novices to read futures market charts:
Understand the Basics:
Chart Type: There are different types of graphs, such as 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 right for your trading style. For example, day traders may use a 5-minute chart, while long-term traders may use daily charts.
Price and Volume: Price refers to the price of the futures contract, while volume refers to the amount 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 increase.
Downtrend: A downtrend is characterized by lower highs and lower lows. This is a sign that the market is negative, and prices are expected to fall.
Sideways Trend: A sideways trend occurs when the market is neither bullish nor bearish, 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 bearish if the closing price is lower than the opening price. The body of the candle will be red.
Doji: A Doji occurs when the opening and closing prices are the same or here almost identical. It signifies uncertainty 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 trends, momentum, instability, and strength of the market.
Some commonly used technical indicators are 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 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.