What types of charts do traders use most for analysis?
This is a frequently asked question that Forex beginners ask.
For this reason we will talk a little about this subject today.
Price charts are fundamental in analyzing any currency pair, showing the instantaneous value of the pair over a given period of time. There are many different types of charts but the most commonly used are lines and bars ou Candles.
Let's look at the examples…
The line chart provides a quick way to see the change in market prices over a given period of time.
CANDLE AND BAR GRAPH
The candlestick and bar charts provide a detailed way to see the change in market prices over a given period of time.
Each bar or candle on the chart is defined by four price points (high, low, open and close). The length of the bar or candle represents the trading activity level over a specified period. For example, a ten-minute chart, bar, or candle would represent all trading activity in the market over ten-minute periods. When the price of a currency pair increases, the bar or candle appears one color (usually green) and when the price of a currency pair drops, the bar or candle appears another (usually red). Most traders switch between different times so they can compare market movements and check trends.