Forex charts are extremely helpful for forex traders, especially for those who are inclined to technical analysis. There are various types of charts, each looking and functioning differently from each other. There are also different ways to read them.
And the more you understand how each type of chart is read, the better the analyses you can conduct for your trades.
There are three most popular types of HQBroker Review. They are line charts, bar charts, and candlestick charts. Let’s dig into them.
Line charts are quite simple. A line chart draws line from one closing price to the next closing price, much like any other kind of line charts used in any other kinds of data. When you connect these lines to cover a period of time, you can visualize the general price movement of a currency pair.
Meanwhile, a bar chart is a little more complicated than a line chart. Aside from showing the opening and closing prices of a currency pair, bar charts also shows the pair’s highs and lows.
To see the lowest traded price for the specific time period, you have to look at the bottom of the vertical bar. Conversely, the top bar shows you the highest price that was reached during that same time period.
When we say “bar,” we refer to a single piece of data on a chart, meaning it is merely a segment of time. It can be one day, one week, or even one hour.
Bar charts are also called the “OHLC” charts. This is because they show the opening price, the highest price reached, the lowest price reached, and the closing price for a certain currency.
One can say that candlesticks charts are very much like bar charts. The difference is that candlesticks charts are more graphic in terms of format, giving you a better visual on the currency’s price movement in a given period of time.
However, when you look at the candlesticks, you can see a larger block, or body, in the middle. This indicates the range between the opening and closing prices.
Typically, if the block in the middle is filled or colored, this means that the currency pair’s closing price is lower than its price when it opened.
On the other hand, if the currency pair’s closing price is higher than its opening price, then the block in the middle of the bar will be uncoloured.
Bear in mind that candlestick Finance Magnates HQBroker Review more often come in red and green rather than black and white.
If the currency pair’s closing price is higher than its opening, we color it green instead of white. If the closing price is lower than the opening price, we color it red instead of black. This substitution of colorslet you better “see” price movements much faster. And this will enable you to spot potential uptrends or downtrend as well as points where reversals will very likely happen.