Archive for the ‘Forex Charts’ Category
Forex Trading Types of Charts
Technical analysis is the preffered choice for most Forex Traders. This type of method is mainly used by charts that show the price changes as a trend. There are three types of Forex charts and they each have different approaches to interpreting trends.
Line charts are very simple, they just show a line from one closing price to the next. When these are strung together you can see the price movement of a currency pair over a time period.
example of a Line Chart
Image by Easy Forex
Bar charts show opening prices, closing prices and also the highs and lows. The top bar shows the highest price paid for the price period. The bottom bar will show th lowest price paid during that period. The vertical bar indicates the trading price range as a whole for the time period. The left horizontal hash shows the opening price and the right side horizontal hash shows the closing price.
Example of Bar line.
Bar chart by Baby Pips
Candlestick Charts are the most detailed charts in the Forex market. Bars still show the high to low range with a vertical line. In candlestick charting the large block in the middle shows the opening and closing range during the time period. When the currency closes lower than it opened the block will be colored black. The block will be white when the closing price is higher than the opening price. There are some caadlestick charts that will use different colors. Just make sure you understand what your forex broker uses in with the candlestick charts.
Example of Candlestick chart
Image from Baby pips
