Chart Types: Candles Charts - Line Charts
In trading, there are different chart types that traders can use in their trading. These chart types are provided on the platform and on the trading platform traders can then select which chart type is best for their method. One can choose to trade with line charts, forex bar charts or candlestick charts.
A chart is a graphical illustration of price movement of a currency pair over a given time period.
The chart is drawn on a grid and the user of this chart is at liberty to choose which chart time frame they want to trade with. The trader may select to use hourly trading charts, daily charts or even 1 Min chart timeframes.
To draw charts, 3 methods are used. The techniques used to draw the trading charts defines the type of chart.
The 3 types of charts are: - Candlesticks Charts - Bar Charts - Line Charts
- Line charts
- Bar charts
- Candlesticks charts - Most popular
Line Chart - MetaTrader 4 Line Charts
A single line is drawn from one closing price to the next, shaping a continuous line.
This type of chart provides very little data on the chart and is therefore not too be popular among traders and investors. In fact this type of chart is rarely used by the traders.
Line Chart in Forex Trading - This chart type leaves out critical info about price movement. Data such as opening, high and low point of the price that aren't represented on the graph.
This makes this type of line chart to be regarded as sketchy by trading technical analysts.
The chart below displays example of a line chart.
Bar Chart - MT4 Bar Charts
Forex Bar Charts - This type of chart shows the opening, closing, the high and the low, for a given price interval & is represented by bars that look like the ones drawn below - thence its name bar charts
- Bar Charts - bar chart has got a vertical bar representation showing total price movement.
- Left horizontal bar the opening
- Right horizontal bar the closing
- High and low denoted by highest and lowest point
However, these bar charts are not very easy to work with, especially when they aren't magnified. It becomes hard to interpret the bar chart with ease when trading the market thus making them not popular among investors.
A Bar chart that is not zoomed in makes it difficult to view the opening & closing price just as displayed and shown by this exemplification:
Candle Chart - MT4 Candles Charts
Candles Charts - This is the most commonly used type of trading chart, they resemble candlesticks, thus their name - candles charts.
Candles charts shows opening, closing, high & low of a particular price interval.
The range in between the open price and the close price is called the body of the candlestick.
Candlesticks charts is the most popular/liked type of charts among traders because it's easiest to interpret and analyze when trading the market. Candlestick charts also generates a lot of info about the price movement. This makes candles charts the most widely used type of charting in FX.
Candles Charts
Displayed Below is illustration of candles charts. To know more about candles charts, study this lesson: Technical Analysis of Japanese Candlesticks Patterns in FX Trading.
How to Select and Choose These Chart Types in MT4 Software
To draw any of these types of charts on the MT4 Software/Platform a trader can use the buttons below found on this MT4 platform software.
Drawing Charts on the MT4
- To Select a Bar Chart Click the Bar Button
- To Choose and Select a Candlesticks Chart Click the Candlestick Button Key
- To Select & Choose a Line Charts - Click Line Button
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