A basic understanding of technical determination can drive the novice Forex trader from a micro account to the big leagues in article time, and it surely isn't that difficult to scholar once you realize the basics. At first view all these charts and acronyms can seem daunting and can fast scare the mean novice trader away, but it's surely not as complicated as it looks. Let's take a look at the three most popular Forex charts out there right now.
The Line Chart.
Forex Charts
This is the kind of chart that even non-traders are well-known with. It plots closing prices from one day to the next and connects the two points with a line, forming a jagged line with peaks and valleys from left to right. The general trend of a currency pair is very easy to identify as the price will whether trend up, down, or remain relatively stagnant.
The Bar Chart.
The bar chart is a glorified line chart that not only shows the closing price, but also shows the opening price that day and also the high and low that the currency pair reached that day. Picture a vertical line, with the top point of the line representing the high price traded that day, and the bottom of the line indicating the low price traded that day. Each vertical line also has a horizontal line on the left side that indicates the opening price that day, and a horizontal line on the right side that represents the closing price that day. This Forex chart is particularly beneficial as it's easy to identify the long term trend of a currency pair while also seeing what kind of daily inequity it typically experiences.
You'll often see bar charts referred to as "Ohlc" charts - Open, High, Low, and Close, for the reasons explained above.
The Candlestick Chart.
Candlestick charts are probably the most popular type of Forex chart used by expert Forex traders. It combines the best elements of the line chart and bar chart and adds its own unique twist. A candlestick has a vertical line, just like the bar chart, but instead of having horizontal lines on whether side that recount the open and close prices it has a rectangular box in the middle of the vertical line. The inside of this box is typically white if the price complete higher than it opened, and black if the price complete lower than it opened, although you'll see various color schemes used from site to site.
Candlestick charts don't comprise any extra facts than a bar chart, but visually they're much easier to understand at a quick glance. You'll find that you'll be able to identify trends much quicker and identify market reversals much easier than if you were using a bar chart.
As candlestick charts tend to be the most popular of the Forex charts you'll find that there tends to be a lot more facts ready online about them, together with facts on candlestick patterns. These patterns have been tweaked many times over and are very handy in identifying emerging trends in a currency or stock, and it's very recommended that you warn yourself with some of the more well known candlestick patterns if you want to realize some serious profits in Forex trading.
The 3 Most Profitable Forex Charts
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