Types of charts and the two lenses

There are two broad approaches to deciding what a currency will do next, and the debate over which is "better" misses the point, competent traders lean on both.

Fundamental analysis looks at the economic, social, and political forces driving supply and demand for a currency. The core logic: a stronger economy generally earns more confidence from other countries, which supports its currency. As one economy strengthens relative to another, interest rates and investor confidence typically follow, and the currency tends to gain.

Technical analysis is the study of price action itself, in short, technical analysis means charts. The premise is that historical price behavior can suggest where price is likely to go next, and that trends and recurring patterns can be identified early enough to trade profitably. The single most valuable technical concept is the trend, the market tends to keep moving in the direction it's already moving, and much of technical analysis exists to help you spot that direction early and ride it.

Relying on only one discipline is a common way to get blindsided, a chart can look perfect right up until an interest-rate surprise sends price 30 pips the other way. The market is a balance of fundamental and technical forces, and the goal is to weigh both rather than lean exclusively on either.

There are three common ways to visualize price:

Line charts connect successive closing prices, giving a clean read on overall direction but no detail on the range within each period.

Bar charts (OHLC charts) show the Open, High, Low, and Close for each period. The vertical bar spans the full trading range; a small tick on the left marks the open, a tick on the right marks the close.

Candlestick charts display the same OHLC information in a more visual format. The "body" is the block between open and close; if price closed lower than it opened, the body is traditionally shown filled/black (commonly re-colored red on modern platforms); if it closed higher, the body is hollow/white (commonly shown green). Thin lines above and below the body, the "shadows" or "wicks", mark the session's high and low.

Candlesticks are popular because they're intuitive for beginners, visually fast to interpret, and especially useful for spotting potential turning points, reversals from an uptrend to a downtrend or vice versa. This course uses candlestick charts throughout.