Charts are part of technical analysis in forex trading. However, before proceeding, we must the different charts that is available in our platform, how they differ from each other and why we choose one over the other. Once we have determined which chart type to use, we will look at the different indicators to use to complement our analysis.
There are three main and popular chart types. These are the Line Chart, Bar Chart and the Candlestick Chart. Line Chart is just a simple chart. It traces a line from one closing price to the next closing price. When it is drawn continuously together for a currency pair over a period of chosen time (15 minutes, 30 minutes, hourly, 4 hourly and etc.), you will be able to see the general price movement.
The Bar Chart will show you the opening and the closing price. At the same time, bar charts are also able to show you the highest and lowest price of your currency pair of your chosen time frame on the charts. A vertical line is drawn to coincide with the price where the highest and lowest traded price is for your chosen time frame. Generally, you will be able to see the currency pair's trading range as a whole. To indicate the closing opening and closing price on the bar chart, a horizontal hash is drawn on the left side and the right side of the bar, respectively. Bar Chart are also known as the Open, High, Low and Close charts or OHLC as the acronym.
Finally, we come to the Candlestick Charts. This is, by far, the most popular and most widely used charts by the trader community. At a glance, it essentially looks like the bar chart, except it is presented in a more graphical format and it looks prettier too!
The Candlestick bars are drawn almost the same way as the bar charts. A vertical line is drawn to connect the highest and lowest price for the currency pair. However for candlestick chart, we actually color the larger block in the middle, which shows the range between the opening and closing prices. Usually, if the block is colored black, it means the currency closed lower it opened. If the block is not colored or "white", then it will mean it closed higher than it opened.
Let us see how we interpret the candlesticks. For a "black" candlestick, the top of the colored block is the opening price for that currency, while the bottom of the block is the closing price. For a "white" or not colored candlestick, the closing price is higher than the opening price.
There are three main and popular chart types. These are the Line Chart, Bar Chart and the Candlestick Chart. Line Chart is just a simple chart. It traces a line from one closing price to the next closing price. When it is drawn continuously together for a currency pair over a period of chosen time (15 minutes, 30 minutes, hourly, 4 hourly and etc.), you will be able to see the general price movement.
The Bar Chart will show you the opening and the closing price. At the same time, bar charts are also able to show you the highest and lowest price of your currency pair of your chosen time frame on the charts. A vertical line is drawn to coincide with the price where the highest and lowest traded price is for your chosen time frame. Generally, you will be able to see the currency pair's trading range as a whole. To indicate the closing opening and closing price on the bar chart, a horizontal hash is drawn on the left side and the right side of the bar, respectively. Bar Chart are also known as the Open, High, Low and Close charts or OHLC as the acronym.
Finally, we come to the Candlestick Charts. This is, by far, the most popular and most widely used charts by the trader community. At a glance, it essentially looks like the bar chart, except it is presented in a more graphical format and it looks prettier too!
The Candlestick bars are drawn almost the same way as the bar charts. A vertical line is drawn to connect the highest and lowest price for the currency pair. However for candlestick chart, we actually color the larger block in the middle, which shows the range between the opening and closing prices. Usually, if the block is colored black, it means the currency closed lower it opened. If the block is not colored or "white", then it will mean it closed higher than it opened.
Let us see how we interpret the candlesticks. For a "black" candlestick, the top of the colored block is the opening price for that currency, while the bottom of the block is the closing price. For a "white" or not colored candlestick, the closing price is higher than the opening price.
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