If you are planning a money transfer abroad or intend to open an account with a Forex dealer one of the first steps is to start learning how to read historical currency exchange charts. Countless websites offer free and paid Forex charts. Real time Forex charts are intended for use by professionals while delayed quotes or yesterdays central bank fixing are used for statistical purposes, which is fine for most applications.
When calculating the cost and the value of your money transfer you need just a basic chart representing the history of movement of the currency rates. In this case, you can utilise reputable websites to provide such information. These include business news agencies, major Forex dealers or some of the leading travel agencies. It is advisable to consult your personal Forex broker and to ask for the information you need; in many cases, your broker will be able to provide you with additional info on various applicable fees and taxes.
A history chart represents the value of a currency against another one. First, you must select the currency pair you want to check. Be aware that the order of appearance of the currencies in the currency pair is important and will produce different results when inverted. At first glance, the EUR/GBP and the GBP/EUR are the same currency pair, but the EUR/GBP chart will deliver results on how much did 1 euro cost in Pounds Sterling while GBP/EUR returns the value of 1 Pound Sterling in equivalent euros.
An average user does not need specialised candlestick charts representing the bid-ask spread utilised by the Forex professionals, a basic line chart is more than enough. The line chart will provide you with information on currency rates during a specific period, say, a year. You can choose not only the overall period you want to observe but also the time intervals i.e. daily, weekly, monthly closing price. The daily interval is most appropriate for studying periods between several months and a year; you do not need a longer period than a year to prepare for your money transfer.
You also do not need special analytical tools, unless you plan to become a Forex professional. The chart will give you a general idea where your home currency is heading compared to another currency. Look at the high and lows to determine the momentum and direction of the trend. This will give you an indication of the approximate exchange rate to expect in the near future. There is no need to scrutinise the historical movement of the currency rates of interest to you. This is a sophisticated skill requiring years of professional development; just learn how to read the basic currency charts, which outline the major trends in the movement of a currency pair. Alternatively, a good currency specialist can give you all the information you need without the fuss.
Dr Timothy Ross is an expert on the financial markets. Recommendation: If you need to make a large or regular overseas payment consider the help of a currency rates specialist as an alternative to your bank.