If you are a trader, then you must understand and understand the
types of forex charts. Why? Because all trading activities involve analysis. Charts are one of the easiest methods for making technical analysis.
Because the charts are very diverse, first identify the types that are often used in trading activities. A trader will be very attached to the analysis. So, make sure you fully understand the differences between chart types in order to produce an accurate analysis.
This is because the graph is able to show continuous movement. In this case, the cost movement within a certain period of time.
3 Types of Forex Charts
Why are they so important? Because they serve to
provide the movement of a product to investors. Every graph, of course, has an X and Y axes. The Y axis (vertical line) shows the cost, while the X axis (horizontal line) shows time which is scaled based on the selected time frame.
This is the patent framework used by all graphic forms. Of course, good chart reading can lead to more significant analysis. This time, we will discuss three types of forex charts that are often used in trading.
1. Line Chart
The first type is the line chart. This type is the type most often encountered when an investor wants to read movements in market price analysis. Why? Because one of these types of forex charts informs the closing price. If you look in detail, each line connects the points of cost movement.
The lines are connected in a certain time to form a graph. This will provide a basic understanding of whether the cost of a product tends to increase or decrease. Don't be surprised if you often see this graph in the application. Because almost all types of platforms must use line method.
2. Bar Chart
The second types of forex charts is the bar. Bar is able to provide more detailed information and more than line. Looking at its shape, a bar chart can show the lowest cost in a single frame. In contrast to the line that shows the peak price.
The lowest point shows the lowest price of the product (Low). While the horizontal line on the left is the product's opening cost. Then, the right horizontal line is the closing price of the product (Close), and the topmost point shows the highest cost for the product (High) at a time.
3. Candlestick Chart
Candlestick charts are the last variation of a series of types of forex charts. This type is more often used by traders because of the completeness of the analysis. Although the information displayed is the same as the bar chart, candlesticks give better emphasis.
There are two parts in the graph, namely shadow or wick and body. Shadows are two vertical lines at the top and bottom. The lowest point of the shadow shows the lowest price and the highest point shows the highest price at a time.
In the shadow there are also upper and lower. If it is long, it means that the buyers in the market are trying to increase the price but to no avail. And vice versa if it is lower, it means that the sellers are trying to lower the cost but to no avail.
In the body chart there are also green and red colors. Green means if the closing price is higher than the opening cost and vice versa is red.
Knowledge of how to read those, especially in the three graphs that have been described is crucial for price analysis. A trader will not go through the analysis phase because it is very crucial in determining the position.
If you want to use the services of a trusted broker, you can use Didimax forex broker as the best forex broker in Indonesia. This can help you to avoid mistakes in understanding types of forex charts.