A forex chart is the primary tool every trader works with. Before you can identify a setup, place a trade, or apply any ICT concept, you need to read a chart fluently. The good news is that it is not complicated once you understand what each element represents. The bad news is that most beginners skip this foundation and jump straight to strategies, which is why they struggle to apply what they learn.
This guide covers everything you need to read a forex chart confidently: the three chart types and which to use, how to read a candlestick in full detail, what different candle shapes signal, timeframes and how to choose between them, how to identify trends on a chart, and how to mark the key levels that ICT traders and all serious technical analysts use every day.
The Three Chart Types
Forex platforms offer multiple ways to visualise price movement. Three chart types dominate: line charts, bar charts, and candlestick charts. You will use one of these almost exclusively once you decide which suits your trading style.
Use candlestick charts. Every ICT concept, every setup in this site’s guides, and every chart example you will encounter in serious trading education uses candlestick charts. The rest of this article assumes you are looking at a candlestick chart.
How to Read a Candlestick
Each candlestick represents price activity over a fixed period of time, one minute, one hour, one day, or any timeframe you choose. Every candle tells you four pieces of information:
- Open: The price at which trading began during that period
- High: The highest price reached during that period
- Low: The lowest price reached during that period
- Close: The price at which trading ended during that period
These four data points are encoded visually in the candle’s body and wicks.
Left: bullish (green) candle. Open is at the bottom of the body, close is at the top. The price rose during this period. Right: bearish (red) candle. Open is at the top of the body, close is at the bottom. The price fell during this period. The wicks (upper and lower shadows) show the full range the price reached beyond the open-close range.
Important Candle Shapes and What They Signal
Individual candle shapes communicate specific information about the balance between buyers and sellers during that period. Here are the most important ones for forex traders:
Timeframes Explained
Every candlestick on a chart represents a specific time period. A one-hour (H1) chart shows one candle per hour. A daily (D1) chart shows one candle per day. Choosing the right timeframe determines what level of market structure you are looking at and what kind of trades you are setting up.
| Timeframe | Each Candle | Used For | ICT Context |
|---|---|---|---|
| Monthly (MN) | 1 month | Long-term trend direction | Rarely used in ICT day trading |
| Weekly (W1) | 1 week | Major trend, key liquidity pools | Higher timeframe bias and weekly highs/lows |
| Daily (D1) | 1 day | Daily bias, daily FVGs, order blocks | Primary bias timeframe in ICT, analyse daily before every session |
| 4-Hour (H4) | 4 hours | Intermediate structure, swing context | Confirms D1 bias, identifies H4 order blocks and liquidity |
| 1-Hour (H1) | 1 hour | Session structure, kill zone setup | Primary chart for identifying Asian range and kill zone moves |
| 15-Minute (M15) | 15 minutes | Entry timing, MSS confirmation | Entry chart, watch for MSS displacement here after kill zone sweep |
| 5-Minute (M5) | 5 minutes | Precision entry, FVG fills | Used for tight entries into FVG zones after M15 MSS confirmed |
| 1-Minute (M1) | 1 minute | Scalping, news events | Too noisy for most ICT setups. Rarely used in standard ICT analysis |
A single bullish daily candle contains an entire intraday story. On H1, you can see the Asian accumulation (flat range), the London Judas Swing (brief dip below the range), and the New York distribution (the strong bullish rally that created the green daily candle). The D1 chart hides all of this detail. The H1 chart reveals it.
How to Identify a Trend
A trend is simply the direction in which price is making its major moves. There are three possible states:
Uptrend (Bullish)
Price is making a sequence of higher highs (HH) and higher lows (HL). Each rally reaches a higher peak than the last. Each pullback stops at a higher level than the previous pullback. The overall direction is upward. In an uptrend, you look for long (buy) setups during pullbacks.
Downtrend (Bearish)
Price is making a sequence of lower lows (LL) and lower highs (LH). Each selloff reaches a lower trough. Each bounce stalls at a lower level. The overall direction is downward. In a downtrend, you look for short (sell) setups during bounces.
Ranging (Sideways)
Price oscillates between a clear ceiling (resistance) and a clear floor (support) without a dominant directional trend. During a range, price bounces predictably between these two levels. ICT traders identify ranging periods as the accumulation phase, where institutions build positions before the next directional move.
Left: uptrend (HH, HL sequence). Look for buy setups during pullbacks. Centre: downtrend (LH, LL sequence). Look for sell setups during bounces. Right: range (price between horizontal support and resistance). ICT treats this as the accumulation phase before a directional move.
Support, Resistance, and Key Levels
Support is a price level where buying pressure has historically been strong enough to stop or reverse a decline. Resistance is a price level where selling pressure has historically stopped or reversed a rally. These levels form because traders remember prices where the market turned before, and many cluster their orders at those same levels again.
In ICT methodology, support and resistance are understood through the lens of liquidity: support levels are where buy orders and sell-stop orders accumulate (SSL), and resistance levels are where sell orders and buy-stop orders accumulate (BSL). Price is attracted to these levels because that is where the orders are, and where the orders are is where institutions need to go to fill their own large positions.
How to Mark Key Levels
On your chart, use horizontal lines to mark:
- Previous day’s high and low (PDH/PDL), the most important intraday levels. Mark these every day before the London session opens.
- Previous week’s high and low (PWH/PWL), larger pools of liquidity, targeted on multi-day moves.
- Equal highs and equal lows, two or more candles touching the same price level. Dense order clusters that price is drawn to.
- Swing highs and swing lows, clear turning points on H1 and H4 that define the current structure.
- Round numbers, 1.1000, 1.2000, 150.00. Retail order concentration at psychologically significant levels.
Setting Up Your Chart on TradingView
TradingView is the most popular charting platform for forex traders worldwide and is completely free to use for the features you need as a beginner. Here is how to set up a clean, functional chart:
- Go to tradingview.com and create a free account
- Click the chart icon and search for your pair in the search bar (type “EURUSD” for EUR/USD)
- Select “Candlestick” as the chart type from the toolbar at the top left
- Set your timeframe, start with D1 (daily) for bias analysis, then H1 for session structure, then M15 for entries
- Right-click on the chart and select “Chart properties.” Set your background to dark or light depending on preference. Many ICT traders use a dark background with green bullish candles and red bearish candles
- Turn off all default indicators (moving averages, volume bars) that appear automatically. Clean price action is easier to read than a chart covered in indicators
- Learn the drawing tools: the horizontal line tool (H key shortcut) for marking key levels, the rectangle tool for marking zones, and the text tool for labelling your analysis
For MT4 (available through most forex brokers), the setup process is similar: right-click the chart, select “Properties,” change the chart type to candlestick, and remove any default indicators from the window. Our MT4 Beginner’s Guide covers the full platform setup step by step.
Common Chart Reading Mistakes
Using too many indicators. Beginners often add RSI, MACD, Bollinger Bands, and moving averages because they have heard of them. Every indicator is derived from price, they lag behind what the candles are already showing you. ICT methodology uses raw price action with key levels. A clean chart with a few horizontal lines is more actionable than a chart buried in indicators.
Trading on a single timeframe. Looking at only M15 means you have no idea whether the move you are entering aligns with the D1 bias or H1 structure. A setup that looks perfect on M15 may be going directly against a daily order flow. Always confirm your timeframe hierarchy before entering.
Marking too many levels. New traders draw horizontal lines at every candle high and low until the chart looks like a prison bar. Only mark levels that are significant: clear previous day highs/lows, obvious equal highs/lows, and major swing points. The fewer, cleaner lines you have, the more clearly you can read what the chart is actually doing.
Ignoring candle closes. The close is the most important part of a candle. A candle that wicks below a support level but closes back above it is fundamentally different from one that closes below it. New traders focus on where the wick reaches rather than where price settled. In ICT, candle closes are the confirmation events that validate or invalidate every setup.
Frequently Asked Questions
Now that you can read a chart, the next step is learning what to look for on it. See the ICT Daily Bias guide to learn how to set direction before every session, the Liquidity Sweep guide for the first ICT concept to apply to your chart reading, and the Market Structure Shift guide for how to identify trend changes. For your platform setup, see our TradingView Guide and MT4 Guide.