Forex chart types It is an indispensable part of any trading activity in the financial market. Price charts provide traders with the most comprehensive view of the market, you can fully know how the price has increased or decreased, it can be compared with previous chart data, from This provides the assessment of market trends. So yes Forex chart types any? Let's learn about chart types in Forex trading with kiemtien.com!
Learn types of Forex charts
1. Line Chart
The line chart can be understood as drawing a line from the closing price of the previous Forex trading period to the closing price of the following time period. When these points are joined together, we get an overview of the price movement of a currency pair over a period of time.
2. Bar Chart
The bar chart type is more complicated. It is used to show the opening, closing, highest and lowest prices of a time period in a trading session at major reputable forex brokers. The lower part of the bar chart represents the lowest price of the selection period, while the upper part of the bar represents the highest price. This price bar represents the trading range of the product.
The highest point of the price bar is High, the lowest point is Low. The small horizontal bar on the left is Open, the small horizontal bar on the right is Close.
With this type of bar chart, you can easily identify rising and falling price bars based on the position of the opening and closing prices. If the open is above the close, the session is bearish and the opposite is bullish.
The bar chart type resolved the limitation of the line chart when showing some of the contention between the buy and sell factions in a transaction.
- Distance from open to close: indicates a strong or weak increase/decrease in price, the greater the distance, the stronger the increase/decrease in price, the advantage is completely slanted to one side.
- The longer the distance from High to Close (bullish bar) or High to Open (falling price bar) shows that in the trading session, buyers tried to push the price up, but the selling force was too strong to pull the price down. down, the market Reject the price up.
- The greater the distance from Low to Open (upper price bar) or Low to Close (downward price bar), it indicates that sellers are trying to push the price down, but there is a stronger buying force pulling the price up. , the market rejects the price. down.
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3. Candlestick Charts – Candlestick Chart
The Japanese candlestick chart or candlestick chart is a form of price chart that is popular and widely used in financial markets, not only in forex trading, but also in stocks and cryptocurrencies.
Each trading session is represented by a candle. Each candle fully shows all 4 Open, High, Low, Close prices as a bar chart, but the representation is different.
The way the candlestick chart shows the evolution of price movement in a trading session is very clear and easy to recognize through the shape of each candlestick.
What type of chart should I choose to trade Forex?
We can give you an immediate answer that candlestick chart type is currently the most used chart type. It is not a coincidence that people love this type of chart, but it is basically superior in many ways to the bar chart format, although both charts show specific price behavior in each session.
As for the line chart, although it does not cause noise, the level of information is low, so it is very rare for traders to use this type of chart.
By reading the article about Japanese candlestick chart, you will know the importance of candle parts like candlestick body and shadow in analyzing price behavior, these are also the most basic knowledge of the method.
If the Japanese candlestick chart has the real body as the green or red part of the candle, the shadow is 2 thin bars above and below the body. In a bar chart, the candle body and shadow are separated from each other by a very small horizontal bar, if you look at the whole big chart it is difficult to distinguish which is the candle body, which is the candle shadow. candlestick analysis will be more difficult.
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In short, choosing which type of chart is most suitable depends on your focus when looking at that chart. In particular, the candlestick chart brings simplicity, clarity and fully presents the information needed to support the analysis.
View more: Instructions on how to read Japanese candlestick charts on Forex
Currently, most professional traders, economic and financial websites, articles and analysis mostly use Japanese candlestick patterns, so for a forex or stock trader, I recommend that you start with a Japanese candlestick chart.
Learn more about chart types and Forex signals This is the basis for faster access to advanced analysis methods, distinguishing them will help you choose the most suitable chart type.
Conclude
Above is a summary of 3 types of Forex charts that you should be aware of in order to be able to choose for yourself an appropriate type for analysis in Forex trading. Hope the article can help you to choose the type of Forex chart. Wish you have the perfect choice for yourself!