Do you know that Forex charts are very commonly used tools for training in the present world? Well, the Forex traders declare that the information they find on the chart helps them to predict the rise and fall in price of Forex. As such, the different graphs seem to have various benefits to the individuals who just do not have any time to conduct research of the Forex trading market. However, if any trader wishes to get the benefit from these charges, then he/she must use them in the right way.
Different kinds of charts you should know
Read on to know about the different kinds of charts that you should know.
Candlestick Charts – Candlestick chart shows four essential variables which include the high price, the low price, the closing price and the opening price. It has the name due to its formation. You need to know that candlestick chart has vertical body, lower and upper wick. These charts do not get involves in the complex mathematical calculations. The body’s length draws attention to the range between opening and closing cost for a certain period of time and thus, understands the present condition of the market. Well, the amount of time can be one minute, one hour, one day or one month.
The colors play a very important role when you are going through a candlestick figure. A candle that is unfilled denotes the opening price of security is less than the closing price for the specified Forex trading period. There are some websites that will indicate this particular candle in green.
In such a situation, the upper part symbolizes the closing price and the bottom part signifies the opening price. In case it is a colored candle, the closing price of security will be less than the opening price. It is usually red or black in color. In this situation, the upper part signifies the opening price and the bottom denotes the closing price. The fine lines which broaden outward from the two borders are known as shadows. These lines are also called tails or wigs.
Bar Charts – Bar chart is amongst the most popular Forex trading charts. It shows the same details like that of candlestick such as low price, high price, opening as well as closing price. It makes use of the bar to signify the four variables without the color of candlestick chart method. There are some bar charts which use different colors. The upper part shows high price trading and the lower part of the bar signifies the less price trading for a specific period of time. The opening price is usually at the left side of the bar and the closing price is usually at the right side. Besides this, you should know that bar charts are much better in comparison to candlestick charts when you are predicting the change in price of the Forex market. It will give you the necessary information about trading Forex market at a glance.
Line charts – Line charts are the easiest amongst the three charts. It is just like a regular graph in the marking sector. Just like the candlestick chart and bar chart, it signifies the closing price of a security. It is denoted with one line. This line attaches the single price for a certain period of time. Thus, amongst the other two kinds of charts, line chart provide you with the least information. As such, it is not widely used.
These are the different kinds of charts that you must be aware of.