01 · How to read a trading chart
Observe How Price Has Changed Over Time
A trading chart shows how an instrument's price has changed across a selected period. Charts help users observe historical behaviour, market direction and how price responded to previous conditions.
Platforms commonly provide timeframes ranging from minutes and hours to days, weeks and months.
Understanding a Candlestick
Each candlestick represents a specific period and contains the open, high, low and close.
Bullish Candle
Shows the upper wick, high, body, opening and closing levels, lower wick and low.
Bearish Candle
The same four prices are displayed when the closing price is below the opening price.
02–03 · Timeframe and market direction
Different Timeframes Can Show Different Perspectives
On a 1-hour chart, each candle represents one hour; on a daily chart, each represents one trading day. A market can appear upward on one timeframe while declining over a shorter period.
Uptrend
Higher highs and higher lows.
Sideways
Price moves within a relatively defined area.
Downtrend
Lower highs and lower lows.
Market direction can change at any time, and historical behaviour does not guarantee future movement.
04–05 · Pricing and position direction
Understand the Quote Before Selecting Buy or Sell
Bid, Ask and Spread
Spread = Ask Price − Bid PriceBid 1.0850 and ask 1.0852 produce a 0.0002 spread. The applicable spread varies by instrument and conditions.
Buy / Long
Opened when the trader expects price to increase. A fall instead may generate a loss.
Sell / Short
Opened when the trader expects price to decrease. A rise instead may generate a loss.
Neither direction guarantees a favourable result.
06–07 · Position size and order type
Choose the Exposure and How the Order Enters the Market
Position size may be expressed in lots, units or contracts. A larger position means the same market movement has a greater effect on its value.
Market Order
Buy or sell at the best available price. Fast movement can cause the final price to differ.
Limit Order
Buy or sell at a specified price or better, subject to the specified conditions being met.
Stop Order
Becomes active when the market reaches a specified level and can be used to enter a position.
08 · Stop loss and take profit
Set Intended Adverse and Favourable Exit Levels
A stop loss is designed to close at a specified adverse level; take profit is designed to close at a favourable level. Neither guarantees exact-price execution under all conditions.
09 · Review before placing an order
Understand Every Part of the Position
Instrument
What market is being traded?
Direction
Buy or sell?
Position Size
How much exposure is created?
Order Type
Market, limit or stop?
Exit Levels
Are stop-loss or take-profit instructions used?
Trading Costs
What spread, commission or financing may apply?
10–11 · Monitoring an open position
Follow Price, Exposure and Open Profit or Loss
A platform typically displays the instrument, direction, opening and current prices, position size, current profit or loss and active stop-loss or take-profit instructions. Monitoring also includes awareness of market conditions and upcoming events.
Open Long P/L
(Current Price − Opening Price) × Position SizeOpening $100, current $103 and 10 units gives a simplified unrealised result of $30.
Open Short P/L
(Opening Price − Current Price) × Position SizeActual calculations vary with the instrument and applicable costs.
12–14 · Costs, closing and review
Understand the Final Trading Result
Spread
The difference between bid and ask prices.
Commission
A separate transaction charge that may apply.
Overnight Financing
An adjustment that may apply beyond the rollover time.
A position remains open until closed manually, by an order or through an applicable account condition. Its closing price is compared with its opening price, together with size and applicable costs.
Reviewing a Completed Trade
Review the market selected, opening and closing prices, position size, market behaviour, applicable costs and final result. The purpose is to understand previous activity; previous outcomes do not predict future results.
Educational information
Practical Knowledge Does Not Remove Market Risk
Orders, charts and platform tools help structure trading activity, but market movement remains uncertain and leveraged CFD positions can result in losses.