Understanding Futures Market Graphs for Newbies
Wiki Article
Futures graphs can seem intimidating to beginners due to the different terms, numbers, and trends involved 해외선물. Nonetheless, comprehending these graphs is crucial for trading in the futures market. Here is a comprehensive guide for newbies to read futures market graphs:
Understand the Basics:
Chart Type: There are various types of charts, like line charts, bar charts, and candlestick charts. Most investors prefer candlestick charts because they provide more data than line or bar charts.
Time Frame: The time frame of the chart can vary from weeks, or even months. Select the time frame that is suitable for your trading style. For example, day traders may use a 5-minute or 15-minute chart, while long-term traders may use daily charts.
Price and Volume: Price refers to the cost of the futures contract, while volume refers to the quantity of contracts traded in a certain time period.
Identify Trends:
Uptrend: An uptrend is characterized by greater highs and higher lows. This is a sign that the market is bullish, 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 negative, and prices are expected to decrease.
Sideways Trend: A sideways trend occurs when the market is neither bullish nor bearish, and prices move within a limited 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 black.
Doji: A Doji occurs when the opening and closing prices are the same or almost identical. It signifies uncertainty in the market.
There are various other candlestick patterns like hammer, shooting star, more info 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 market strength.
Some commonly used technical indicators are Moving Averages (MA), Relative Strength Index (RSI), MACD, 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.