You know that we’ve two forex trading types. Few traders use the charts of price to trade and few traders use political and economical situation of world as well as various countries. The 1st group use techniques of technical analysis as well as the 2nd group are known as fundamental traders. Approximately more than ninety percent of forex traders whose are belonged from the group of technical analyzing. Because you trade consistent with what you look, not consistent with what you read or hear that may be false or else true. Therefore, it’s simpler to trade by using the charts of price as well as technical analysis.
So, I think that we must combine the both. The expert traders must use the techniques of chart analysis as well as also consider basics. Those who’re dependent just on the technical or else basic analysis will undergo from great losses.
This analysis is very vital as well as the charts of price are the fundamental and the very vital part of technical analysis. Therefore, we must learn regarding the various types of price charts as well as the way that we may use them.
So, there’re many types of charts of price in the forex as well as also the stock trading. Few of those are really worthless as well as I believe approximately no one use those to trade. Therefore, here I invest few time to tell about the useful and popular charts.
A. Line chart
B. Candlestick chart
C. Bar chart
D. Heikin-Ashi chart
E. Renko chart
Prior to I tell you about the charts of price, I must tell you about time frames. So, if you’re really understood to the forex or else stock trading, then you can’t understand that what is the time frame.
Every price chart must be plotted consistent with a particular time frame. the trading podiums support few particular as well as genuine time frame. 1 minute, three minute, five minute, ten minutes, fifteen minutes, thirty minutes, sixty minutes, 2 hours, 4 hours, daily/weekly/monthly as well as yearly.
However, in several platforms you’re as well be capable to define the routine time frame. Such as, you may as well work with the 2 minutes of time frame.
However, what’s the time frame? This is a very particular time period. The platform records and considers the modifications of price in the time period. Every time period will have the open, low and close price. Such as, at what time you sketch a price in five minutes of time frame, then the podium records the modification of price in every five minutes period. Therefore, every 5 minutes that will have the open price. The open price is a price, which we’ve exactly at what time the 5 minutes period begun. The close price is a price, which we’ve exactly at what time the 5 minutes period ended. The high price is a maximum price throughout the five minutes period as well as so the low price is a minimum price throughout the five minutes period.
No need to worry that if it seems a little tough to know. I’[l give you some more examples as well as explanations & you’ll know it.
The tick chart is the only chart, which does not use some time frames. This is the line chart that records every price modifications. Like tick chart which has no utilization in the trading, therefore I haven’t comprised in a record of price chart as well as I’ll not tell more about it.
A. Line Chart:
In this chart, the modifications of price are shown by using the line. So, even line chart must be plotted consistent with the particular time frame however we’re capable to decide if we wish the chart that to be planned consistent with the open price, close, high and low price. The close price that is much reliable as well as famous because majority of the traders do not care about price fluctuation throughout the time frame as well as just close price that is vital for them. therefore line charts which are consistent with the close price genially unless you modify the default setting.
Additionally to open price, close price, high price and the low price that you may have few other settings. Such as, an average of whole four amounts:
(O+H+L+C) / 4
Or few others settings just like:
(H+L+C) / 3
(H+L+2*C) / 4
(H+L) / 2
The close price which is the much famous as well as if you wish the chart to wrap some more modifications that I suggested you to employ the (O+H+L+C) / 4 setting. Such setting eliminates extra noises from the chart as well as it turns out to be simpler to work.
To plan the sixty minutes line chart, and the platform only connects close price of every hour. Such as, close price 8:00 is 1.5722 as well as close price 9:00 is 1.5730 and …
This is what the line chart may be plotted. At the present, let us see that the other line chart settings.
Advantages of line chart as well as it really suggested to do work with this:
In the other types of charts just like the candlestick charts, this is a bit hard for starters to see as well as find patterns, which are used in the technical analysis just like double tops, head & shoulders, double bottoms and … . In such case, line chart seems a bit simpler to use however generally I don’t suggested to use the line chart as it’s so poor. You may use this to find the patterns, trends, pennants and after that breakouts however your forecasts will be more stronger at what time you have the stronger signals via candlesticks.
B. Candlesticks Chart:
These charts are most famous charts in the forex as well as in the stock trading. Majority of the traders like candlestick charts. These charts are more accurate as well as actual time indicators. And I’ve already written the detailed article regarding candlestick charts.
C. Bar Chart:
These charts are candlesticks of American version. The candlesticks are made by the Japanese executive. They state that the Americans as well made the bars whereas they understood nothing regarding Japanese candlesticks. And I do not understand that it’s really probable that the similar thing which to be made by various people, simultaneously whereas they understand nothing regarding one another. There’s undoubtedly bar chars that were used/invented by the Americans many years after invention of charts of candlesticks by Japanese executive.
Everything is similar in bar as well as candlestick however just the form. They both explain the open price, close price, high price as well as the low price.
D. Hekin-Ashi Chart:
This chart is invented by Japanese executive too as well as becoming very famous amid the stock and forex traders. I’ve already written the detailed article regarding Heikin-Ashi charts as well as they way that you may use in your deals.
E. Renko Chart:
Japanese invented the Renko chart however it’s a different chart. In Renko charts, the time as well as the volume aren’t considered & they’re plotted consistent with price only. Like these charts are turning out to be famous as well, I’ve also written article about Renko charts.
At present you understand about various types of charts, and you may simply reply the question mentioned above. The charts of candlesticks are greatly preferred as they give clearer, sharper, more actual time as well as critical signals. So, I don’t suggested some other chart. Yet Heikin-Ashi, which is the good chart must as well used beside the candlestick chart as it’s delayed as well as if you make trade by using just Heikin-Ashi chart, you’ll be also late in several trades.
These charts are as well good however for rock trading merely. You’ll require to have number of patience as well as also money in the account as in several cases price will move against you from time to time for many days but you trade by using Renko chart. And if you deal by using Renko chart. So I’ve never attempted this chart in my actual trades however I’ve had watch at them for turn out to be acquainted with their attitude. It’s good for swing trading however question is that if you wish to be the swing trader that why you must not use candlestick charts? These charts are too good for the swing trading.