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3 Types of Forex Charts and How to Read Them

3 Types of Forex Charts and How to Read Them

Forex market trend can be represented using three types of charts. These help traders to understand the rhythm of the market and act accordingly. These charts are-

1. Line Charts –

These are very simple charts which do not divulge much information. A line chart is prepared by drawing a line between two consecutive closing prices. A series of close prices of a trading period can be seen in a line chart. These charts give a glimpse of the trend with no data on open prices. Though these charts are not so favorite with the traders, they are used for a quick determination of the market trend.

2. Bar Charts –

Bar chart gives more information than a line chart as it is prepared using both open prices and close prices for a particular period. It also shows the highest and lowest prices for that period. The highest price can be seen at the top of the vertical bar and the lowest price at the bottom of the same bar. The open price can be seen on the left side of the same bar as a small horizontal hash and the close price is on the right side as a horizontal hash. Another name for this chart is OHLCchart which stands for Open, High, Low and Close. You can observe the price changes that occur within a trading interval through a bar chart.

3. Candlesticks Chart –

These charts are the graphical representation of the exact data which bar chart shows. Candlesticks chart contains blocks which depict the bar area between open and close prices. Its graphics make it easy for a trader to understand the market rate and its movement.

3 Types of Forex Charts and How to Read Them

4 Comments

  1. Gharti Anil on August 26, 2019 at 4:05 PM

    Bar chart is the best for forex trading because it gives a lot of information as it is prepared using both open prices and low prices for a particular period. The highest price can be seen at the top of the
    vertical bar and the lowest price at the bottom of the same bar which makes more understandable and easily to figure out and analyse the chart.

  2. Anil on July 28, 2020 at 8:43 AM

    Very useful and important

  3. nitesh on July 29, 2020 at 3:48 AM

    Useful.

  4. 11800287 on August 9, 2020 at 12:20 AM

    Awesome.

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