Candlestick Trading Blog
May 31, 2008
Forex Charts
Trading in the forex markets requires the ability to trade using forex charts. They are also known as price charts and can include line graphs, bar graphs and candlestick graphs. The purpose of using charts when forex trading is to see certain prices during a specified time frame. The time frame can range from minutes to years and anytime in between. There are also point-and-figure charts that track value instead of time intervals. In today’s article we will discuss all types of charts available including line charts, bar charts, candlestick charts, and point-and-figure charts. Line charts contain a very broad overview of price movement showing only the closing price for a specified time interval and they are the simplest to use. Forex charts of this nature make it easier when analyzing chart pattern reversals and trends, but they don’t provide as much detail as a bar chart or Japanese candlestick chart. Bar charts can be more difficult to read but it is pretty easy to tell if the price rose or fell. With a bar chart the length of a line displays the price spread during that time interval and it allows you to see the price variation. The larger the bar in this chart the greater the price difference between the high and low price during a specified interval. To sum it up, bar charts are price bars that are a linear representation of a period of time. They allow the user to see a graphic representation that summarizes the activity of a specific time frame. They are more commonly used when fx trading in addition to candlestick charts. Candlestick charts, also know as Japanese candlesticks, are used to represent the same information as price bars in bar charts. These forex charts are only different in that the open and close form the body of a box which is displayed with a color inside. Candlesticks were originally developed Point-and-figure charts are charts that follow the changes in prices and not the changes in time. In the stock charts described above, the comparisons are made between the price as it varies between time intervals. The point-and-figure charts are different because any column form this type of chart can represent any amount of time. These forex charts have no set amount of time for each figure and movements take place only when the minimum determined price moves. If the value does not change, then there are no new marking that appear on the chart. Trading forex is a very popular method of trading these days, but you must learn how to read forex charts in order to be successful. Now that you know a little bit about each type of chart available, do your own research to determine the investing strategy that works best for you. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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