The FOREX or foreign exchange market is the largest and most liquid market in the world. Prices are constantly changing as traders buy and sell currencies. There is a lot of data available to help traders, but the sheer amount of information might be overwhelming to those who are just entering the market. Using Excel, new traders can group and graph only the essential data and bypass some of the noise.
Pick the currency pair or pairs that you intend to trade. In FOREX, currencies are traded in pairs. The first currency is called the base currency and the second currency is called the quote currency. For example, a EUR/USD currency pair tracks the value of a euro quoted in U.S. dollars.
Obtain relevant information about the currency pair or pairs you identified in Step 1. The most important information is the price, but you can use other information as well. Other factors to consider include trading volume, open interest and a moving average of the price.
Open a new Excel spreadsheet and input the information you obtained in Step 2. Input the data in either rows or columns, and use one row or column per data type. For example, if you input the data in columns, use one for price, another for volume and so on.
Use the graph feature in Excel to create graphs of your data. There are several ways to do this step. Highlight one column at a time to create separate graphs for each data set, or highlight all the data to create a graph featuring all of the data sets.
Use the graphs to aid you in making trading decisions. Once you have a graph of prices, look for patterns such as double tops or bottoms that indicate possible market reversals. If you graph trading volume, look at rising and falling volume in contrast to the price information, to determine the strength of price moves.
Adam Parker is a writer from Virginia. He holds a Bachelor of Science from James Madison University. Parker has written articles for online sources including The Motley Fool, Gameworld Network and Glossy News.