Usage graph or chart is the most important thing in technical analysis because the only object that is used is that price movements can be mapped to a chart / graph.
Chart types for Forex MT trading platform
Some types of Forex charts commonly used in technical analysis are as follows:
1. Line Chart
Or it could be called a line graph, this graph is formed from simple line that connects from one closing price to the next closing price. a continuous line, where we can see the pattern of price movements of a currency pair over a specific period. See the picture below.
2. Bar Chart
In a bar graph, containing information: opening price (Open), the closing price (Close), and the dynamics of price movements (High / Highest – Low / Low). The lower part shows the lowest price, while the top is the highest price, within a certain period of time.
This period of time varies, can in 5 minutes, 10 minutes, 15 minutes, 1 hour, 1 day and 1 month.
In terms of forex trading this period is sometimes called the Time Frame.
Cut line on the right shows the opening price, and on the right shows the closing price. See the picture below for more details.
The bar graph is also often called “OHLC” chart. Referring to the Open High Low and Close
3. Candlestick Chart
Chart Candlestick or it could be called a candlestick chart, showing the same information as the bar graph, but the candlestick chart appears in a graphic format that is more complex.
In candlestick chart on the middle vertical line will be wider so as to form box. This box will be given a color which would indicate that prices rise or fall. If the box is not colored / white, indicating the price rises, whereas when the black colored box indicates the price down. See the picture below.
In the process, people are more accustomed to signify that what goes up in green and something fell in red. So in applications candlestick chart usual also shown with green and red color configuration.
So if within a certain period (Time Frame) whereas closing price > opening price, then the box will be colored green / rose. In the contrary, if the closing price < the opening price, then the box will be red.
It is expected to assist and accelerate traders in technical analysis. So the purpose of making boxes and stained on the candlestick chart is a visual aid to give better point of view to the traders.
Candlestick Charts are widely used among traders, most traders sees candlestick are easy to read, and more informative.
Advantage of using candlestick chart.
• Provide an easier view at interpreting market price movement.
• Better series pattern formed in use for better conclusion of where next market price projection.
• Well defined upon identify market price turning point (reversal)