Types of XAUUSD Charts
In xauusd trading there are three types of charts that traders can use to trade XAUUSD.
Charts are graph representations of the price movement that are drawn on a grid & they can be drawn using different chart time-frames like 1 minutes trading charts, 5 minutes charts, 15 minutes trading charts, 1 hour, 4 hour, daily, weekly & monthly chart time-frames.
A trader will select the chart time-frame to trade with depending on their trading style for the day traders they will choose the 15 minutes trading charts and scalpers will use the 1 minutes trading charts, swing traders will use the hourly charts.
These trading charts can be drawn using different chart representations, these are:
- Line Charts
- Bar Charts
- Candles Charts
Line Charts
The line chart is a single continuous line that is drawn to represent the closing price, if a trader is using the 5 minute charts then closing price for every 5 minutes is drawn & connected to the next close of the next 5 minutes henceforth this forms one continuous line that forms the line chart.
This chart type leaves out a lot of information about the gold price movement; this chart only draws the closing price and leaves out the high price, the low price and the opening price. Because of this the line chart is not very popular among xauusd traders - gold traders instead prefer to use other chart types like the bar charts and candlesticks charts that include this info on their chart representations.
Bar Chart
Bar charts will plot all the info about price info - this information is referred to as OHCL - Opening price, High of Price, Closing Price and Low of Price.
This info is represented in the format of a bar. The bar charts have 2 different colors; these are red for when prices move down and blue for when price moves up, the bar chart is shown below.
These bar charts plot all the price info just as shown above. The vertical bar represents the total price movement, the left horizontal bar shows the opening price and the right horizontal bar shows the closing price, the highest & lowest points represent the high of the price and low of the price respectively.
These charts are not very visually appealing/identifiable when drawn close together just as shown below and for this reason/explanation these bar charts aren't commonly used when trading gold.
Candlestick Charts
These are the most oftenly used types of charts - these chart show all the info of price - OHCL in an easy to interpret format.The candle charts are of 2 different colors, red for when the price moves down & blue for when the price moves up.
These candlesticks charts look like candlesticks with wicks on both sides. The body of the candlestick shows the difference between opening price and closing price. The high and low which are represented by what is referred to as the shadow this is the part that resembles candle wicks represents the highest price & lowest price.
An example of how gold trading charts look is shown below:
This is the most frequent used trading chart in trading gold.
To choose between any of these chart types on the trading platform a trader can use the buttons shown below.
A trader can switch between various chart types using the above buttons when trading the xauusd market.
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