Types of charts
| Types of charts |
 |
 |
 |
| Wednesday, 17 September 2008 17:52 |
|
PIn forex trading, there are three main types of charts: the line chart, the bar chart, and the candlestick chart. These three are the most popular types of charts used in foreign exchanged trading by analysts. Line charts draw a line to indicate movement from one closing price to the next closing price—this tracks the general movement of one currency over time. Line charts are more difficult to use because of the lack of information that is available on the chart. However, many analysts find this type useful. Bar charts are a little more useful because while showing the closing prices and opening prices, they also show the highs and the lows. This type of chart is also known as the “OHLC” chart because it shows the ‘open’, ‘high’, low’ and the ‘close’ for a currency. Candlestick charts show the same thing as a bar chart, but in a cleaner and easier to read fashion. People prefer this type of chart because it is easier to interpret and most beginners can utilize it. Candlestick charts are built for easy use because our eyes adapt to bar information. Each candlestick pattern uses names or codes to identity a particular movement that make it easy to memorize. They are also good for identifying large market turning points, including reversals. |