Types of Forex Charts
How to Understand Different Types of Forex Trading Charts
There are different types of forex charts used in forex technical analysis and the three most common forex charts are line charts, bar charts & candle charts.
Forex Line charts & Bar Charts are not as popular as Forex Candlesticks Charts
Forex Candlesticks Charts are popularly used in the forex market because the forex candlestick shows the direction of forex price movement based on the color of the candlestick. The distance between the opening price & closing price is called the body of the candlestick, the top and bottom lines are known as shadows and these represent the high and low of the forex price.
The body of a forex candlestick is based on the opening forex price & closing forex price of a particular forex chart timeframe period.
If the Opening forex price is lower than the closing forex price the color of the candlestick body will be blue or green meaning forex prices went up. A bullish forex candle - price moved up - blue or green color forex trading candlestick.
If the Opening forex price is higher than the closing forex price the color of the candlestick body will be red meaning forex prices went down. A bearish forex candle - price moved down - red color forex trading candlestick.
The thin lines that protrude above & below the forex candlestick body are called wicks or shadows.
Forex Bar Charts
Forex bar charts are used to display information that is similar to forex candlesticks only that this charting method uses bars to plot forex price movement instead of candlesticks. The bar has a line on the left and right side - the left side is the opening price & the right side is the closing price. Different colors are used for different bars to display the direction of the forex price movement - green bars for when price moves upwards and red bars for when price moves down.
Forex Line Charts
Forex line charts are used to draw closing price as a continuous line on the forex chart.
Line forex charts are the simplest forex charts that don’t give much details on the forex chart because just a line is drawn to connect one forex closing price to the next forex closing price and this line chart will show a series of the forex closing prices.
Forex traders use forex charts to determine the direction of the market and to identify buy and sell forex setups & signals.
The three commonly used forex charts - Line Charts, Bar Charts & Candlesticks Charts are provided for on the forex trading platform - MetaTrader 4 & MT5 platform and traders can choose the type of forex charts that they want to trade with.
How to Understand Different Types of Forex Charts
Different types of forex charts can be used by traders to analyze, interpret and understand the supply and demand of a forex instrument.
The forex charts studies can help forex traders identify various forex trading setups that have different interpretations for supply & demand.
Forex traders can use these forex setups to identify forex trading signals of where to buy & sell and where to close open forex trades.
To read a forex chart a trader will need to learn about the three different forex chart types.
Forex traders will also need to know about the various forex chart timeframes for these forex charts - 1 minute chart timeframe, 5 minutes chart timeframe, 15 minutes chart timeframe, 30 minutes chart timeframe, 1 hour forex chart timeframe, 4 hours forex chart timeframe, 1 day forex chart timeframe, 1 Week and 1 month forex chart time frame.
Types of Different Forex Charts
