The Six Different Types of Charts

What are the Different Chart Types?

There are several different types of charts used in technical analysis & these charts are explained below.

One can use this chart types tutorial to find out which chart types are best for them to use when analysis the market price movement:

Line Charts

Line charts are basic charts that only draw a continuous line connecting closing price from one chart timeframe period to the next.

Gold line chart provides price data as a continuous line that connects a series of closing prices.

The gold line chart will not draw other price information such as the high of the price, the low of the price & closing of the price.

Traders can also use gold line charts to identify & trade technical analysis patterns such as double top and double bottom.

Traders can also use gold line to identify trends & to draw trendlines on these gold line charts.

Bar Charts

Gold bar charts will show the price action data of a particular time-frame period.

The gold bar chart will show high price, low price, open price and close price.

The bar chart will be represented by a vertical line that represents the bar & then there will be a small dash to the left of this vertical bar showing the opening price and another small dash to the right of this vertical bar showing the closing price.

A gold bar will continue and start plotting from where the previous price bar left.

Traders can also use gold bar charts to identify & trade technical analysis patterns.

Traders can also use gold bar charts to identify trends & to draw trendlines on these gold bar charts.

Candles Charts

Candlesticks charts are used to represent all the data of the price action movement which includes: high price, low price, open price and close price.

A gold candlestick has two parts the body of the candlesticks and the shadows of the candlestick.

The body of candle shows the price action between opening price & closing price. The body of the candlesticks will have different colors depending on the direction of the price movement, blue or green candlesticks when price moves upwards & red candlesticks when price moves down.

The length of the body of the candlesticks will determine how much price movement there was between the opening price & closing price for a particular time-frame period.

The lower & upper thin lines protruding out of the candlestick body are known as shadows & the bottom and top of these shadows represent the low & high price of a particular price period.

A lot of information can be analyzed by trades from the body and the shadows of a trading candlestick.

Candlesticks patterns is a technical analysis study that explains how to read candlesticks and how to interpret signals from these candle-sticks patterns.

These candles patterns include:

• Doji Candlestick
• Marubozu Candlestick
• Hammer Candlestick
• Inverted hammer Candlestick
• Shooting Star Candlestick
• Piercing Line Candlestick
• Dark Cloud Cover Candlestick
• Morning Star Candlestick
• Evening Star Candlestick
• Bullish Engulfing Candlesticks
• Bearish Engulfing Candlesticks

Heikin Ashi Charts

Heikin-Ashi is Japanese & means average bar.

Heikin Ashi charts are used because it is easier to identify trends using Heikin Ashi Charts

Heikin-Ashi charts look like candles but are calculated using a different technique.

Heiken Ashi candle-stick price points are calculated as follows:

Opening Price - Opening price is calculated as a average of the opening & closing price of the prior candlestick

High Price - the high price of Heikin Ashi candle is chosen from one of the following data points of the previous candlestick - high, opening price and closing price - depending on which has the highest value

Low Price - the low price of Heikin Ashi candle is chosen from one of the following data points of the previous candlestick - low, opening price & closing price - depending on which has the lowest value

Closing Price - Closing price is calculated as the average mean of opening price, high price, low price and closing price of the prior candle

Heikin Ashi charts generate signals that are slower as when compared to ##2candlesticks charts ++1and this is because of the technique of calculation used to plot the Heikin Ashi charts.

The slower signals generated by Heikin Ashi charts can be used to trade more volatile prices because this Heikin Ashi charts delays in reacting to prices will help prevent traders from trading gold whipsaw signals.

Heikin Ashi charts have less gold whip saw signals because of the delay in calculation of the prices.

Renko Charts

Renko charts adds a square block on the chart when price moves by a certain specified distance.

Renko charts are also used to filter out the time when the market is consolidating

When price moves by this distance the Renko charts adds another square block.

The square block will be added in the direction of the price move.

Renko charts are used to identify the trends & trade these trends.

Point & Figure Charts

The point & figure charts are used to filter out the time when the market is consolidating

Point & Figure charts are drawn with X & 0 columns that are vertical.

Point & figure charts are used to compress time using the point and figure chart representations because point & figure adds a new X or 0 vertically rather than next to the previous point & figure & only when the point and figure calculates the trend to have changed then a new vertical bar is then added to the right side of the point and figure charts.

Point & Figure charts are used to identify the trends & trade these trends.

The Six Different Types of Charts Used in Gold Trading