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02 · Level 2What a chart shows, what the usual indicators are for, and how gold, indices and crypto CFDs differ from currency pairs. Fifteen lessons.

Reading the market: charts, tools and instruments

  1. 2.1

    Charts and timeframes

    One market looks like several different markets depending on the timeframe you open. Which one you trade decides what the rest of your plan has to be.

  2. 2.2

    Candles: what one candle tells you

    A candle holds four numbers — open, high, low, close — for one slice of time. Everything read off its shape comes from those four.

  3. 2.3

    Trend, support and resistance

    Where price has turned before is where traders watch next. The levels are not rules; they are places where orders tend to sit.

  4. 2.4

    Indicators: MA, RSI, MACD, Bollinger

    Each of the four is arithmetic on past prices, shown as a line. Knowing which arithmetic tells you what the indicator can and cannot react to.

  5. 2.5

    Fibonacci levels

    A tool that divides a move into fixed proportions. What it actually marks is where a lot of traders have placed the same lines.

  6. 2.6

    Price action: trading without indicators

    Reading the chart from structure — highs, lows, ranges and breaks — instead of from a calculated line.

  7. 2.7

    Smart money: order blocks, FVG, liquidity

    A vocabulary built on where large orders are assumed to sit. The terms are specific; the assumption behind all of them is the thing to understand.

  8. 2.8

    Gold (XAU/USD): how it differs from currencies

    Different contract size, different pip, wider ranges. The arithmetic of risk per trade changes with all three.

  9. 2.9

    Crypto CFDs: bitcoin without a wallet

    You trade the price, not the coin: no wallet, no transfer, but weekend hours, wider spreads and funding costs of their own.

  10. 2.10

    Index and share CFDs

    An index CFD moves with a basket, a share CFD with one company. Both carry hours, dividends and corporate events a currency pair does not.

  11. 2.11

    Scalping: why costs decide the outcome

    At a few pips per trade, the spread and commission are most of the result. The lesson is the arithmetic, before the technique.

  12. 2.12

    Day trading

    Positions opened and closed inside one session: no swap, but every decision made while the market is moving.

  13. 2.13

    Swing and position trading

    Holding for days or weeks moves the cost from spread to swap and the risk from one session to overnight gaps.

  14. 2.14

    Sessions, news and the calendar

    Which hours a pair actually moves in, and which scheduled releases widen spreads enough to matter to a stop.

  15. 2.15

    A plan, a journal and a backtest

    Three written artefacts: what you will do, what you did, and what the rule would have done before you used it.

What this level changes about the way a chart looks to you

At the end of level two, a chart stops being a line that moves up and down. You can name the timeframe you are looking at. You can say what one candle covers and what its body and wicks show. You can point to a level where price turned before and explain why you marked it. None of that needs a paid tool or a signal group.

The level also gives you a way to compare instruments. EUR/USD, gold, an index and a bitcoin CFD all appear on the same screen, but they do not cost the same to hold. One moves in small steps, another can jump several naira in a minute. By the end you can look at a contract specification and work out what a move of a given size would cost you in naira, before you place anything.

What you cannot do at the end is predict the next candle. Nothing in these fifteen lessons claims that. The aim is narrower and more useful: you can describe what the market has already done, decide in advance what would make you act, and write that decision down.

The order the ideas build, and where they meet

The level starts with the frame. A chart is a record of agreed prices over a chosen period, and the period is your choice. Change the timeframe and the same market looks calm or violent. Every later lesson assumes you have settled which timeframe you are reading and why. Candles come next, because they are the smallest unit of that record. Then trend, support and resistance, which are just ways of describing where price has repeatedly stopped.

Indicators arrive after that, and they arrive second on purpose. A moving average, RSI, MACD or Bollinger band is arithmetic done on past prices. Each one answers a different question, and none of them sees the future. Fibonacci levels and price action follow, and both are attempts to read the chart with less arithmetic. The smart money vocabulary, order blocks, fair value gaps and liquidity, is a set of names for patterns that some readers find clearer than an indicator and others find less so.

Only then does the level turn to instruments. Gold, crypto CFDs, indices and share CFDs each carry costs and hours that differ from a currency pair, and the differences are what decide whether a short-term method is viable. The final lessons on scalping, day trading, swing and position trading pull the two halves together. A style is not a personality. It is a holding period, and the holding period sets your costs.

What trips people up in this stretch, and how long it takes

The first trap is collecting indicators. Four indicators on one chart usually say the same thing four times, and the reader mistakes agreement for confirmation. The second trap is switching timeframes until a chart agrees with the trade you already wanted. A five-minute chart will eventually show almost anything if you keep looking.

The third trap is cost blindness. A method that looks profitable on a demo account can lose money once spread and any commission are counted, especially if you enter and exit many times a day. This site puts cost first for that reason. Before you judge a method, work out what one round trip costs in naira on the instrument you are using. That figure varies between brokers, and it varies between instruments at the same broker, so there is no single number to memorise.

The fourth trap is expecting speed. Fifteen lessons is a reading course, not a training programme. A realistic pace is one lesson a day with a chart open beside it, so about three weeks, and longer if you practise each idea on a demo account before moving on. Nothing here needs to be rushed. The market is open next month.

Doing it once, step by step

Work through these five steps once, in order, before you start lesson one. Each one takes minutes, and together they set up the whole level.

  1. 01

    Open a demo chart of EUR/USD

    Use a demo account from any broker you can register with from Nigeria, and open EUR/USD, which trades near 1.0850. Do not fund it. You are only looking, and a demo chart shows the same prices as a live one.

  2. 02

    Set the timeframe to one day

    Find the timeframe control and select one day. Then switch to one hour and back. Notice that the shape changes while the market does not. This is the first idea the level teaches, so meet it early.

  3. 03

    Find the spread and the swap

    Open the contract specification for EUR/USD on that broker. Write down the spread and any overnight charge. These are the costs the later lessons keep returning to, and they differ from broker to broker.

  4. 04

    Check the regulator

    Look for the broker's registration details and confirm what SEC Nigeria says about firms offering these products to residents. If the information is hard to find, treat that as information. Payment by bank transfer, USSD or card does not by itself tell you who regulates the firm.

  5. 05

    Start a plain notebook

    Open a document or a paper notebook and date the first page. You will add one line per lesson: what you understood, and what you still cannot explain. The journal lesson comes last, but the habit costs nothing to begin now.

Questions that come up next

How much does it cost to look at a chart?

Nothing. Charts, candles, moving averages and the other tools in this level are free on most platforms, and a demo account costs no money. The costs begin when you place a trade, not when you study one. A platform may still ask for a deposit before it opens a live account, so read that part of its terms.

How long does level two take to finish?

Fifteen lessons at roughly one sitting each is about three weeks if you read one every weekday and do the small practice task. Reading alone takes less, perhaps a week, but then you have read about charts rather than read charts. Give each new idea a few days on a demo chart before moving on.

What does one pip on EUR/USD cost me?

On EUR/USD, one pip is 0.0001 of the price, so a move from 1.0850 to 1.0851 is one pip. What that pip costs in naira depends on your position size and on the exchange rate your broker uses, and both vary between brokers. Work it out from the contract specification before you trade, not after.

Do I need a funded account to learn this level?

No. Everything here can be practised on a demo account, and the point of the level is to read a chart and compare instruments, not to earn. If you do fund an account later, most brokers in Nigeria accept bank transfer, USSD or cards, and each method has its own timing and fees. Check what your own broker charges for deposits and withdrawals.

Is SEC Nigeria protecting me from losing money on a trade?

No. SEC Nigeria regulates how investment products are offered and who may offer them, and it publishes rules for the firms it covers. It does not decide whether a trade makes money, and it does not refund losses. If a firm claims a regulator guarantees your profit, that claim is false.

Why does the same chart look different on two timeframes?

A timeframe is the period each candle covers, so a five-minute chart and a daily chart are two summaries of the same prices. A move that looks like a sharp trend on the short timeframe can be a small pause on the long one. Decide which timeframe you are reading before you mark anything on it.

The words used on this page

Timeframe
The period of time that one candle or bar on the chart covers. A five-minute chart shows one candle for every five minutes of trading.
Pip
A standard small step in a currency pair's price. On EUR/USD it is 0.0001, so 1.0850 to 1.0851 is one pip.
Contract specification
The page a broker publishes for each instrument. It lists the size of one contract, the hours, the margin and the costs.
Support and resistance
Price levels where the market has repeatedly stopped falling or stopped rising. They are drawn from past prices, not predicted.
Holding period
How long a position stays open before it is closed. Scalping, day trading and swing trading are names for different holding periods.
Backtest
Applying a set of rules to past prices to see what would have happened. It shows how the rules behaved before, not how they will behave next.

What to take away

  • A chart is a record of past agreed prices, and the timeframe is your choice.
  • Indicators are arithmetic on past prices; none of them sees the future.
  • Different instruments carry different costs and hours, and that decides whether a short-term method is workable.
  • You can describe what the market has done and write down what would make you act. You cannot predict the next candle.

Printable summary

Every lesson in this level on a few pages, with the worked figures. For reading away from the screen.

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Start at the first lesson if this is new. If you already have an account, Level 3 is the one that keeps it.Amarayour course guide