Forex Charts as Tools in FX Tradingsubmitted by fxshooting to u/fxshooting [link] [comments]
Forex trading is not a guessing game. It involves analysis of data and constant vigilance on the side of the trader in order to form an intelligent decision when it comes to making an investment. Traders often use a variety of tools and systems in order to help them determine the trends of the market. Using Forex charts is not uncommon as it helps in visualizing the trends and help traders quantify and understand the trends more accurately. Some of the most popular charts used by FX traders are the line, the bar and the candlestick.
The Line Chart
The line chart is the most basic of the three commonly used charts in Forex. Its name is derived from the series of interconnecting lines of data points formed by tracing the patterns of closing prices over a period of time. Relying on the line chart alone is not enough to make an accurate analysis, however, its strength as a tool is due to the clear visual it provides when it comes to data regarding closing prices from one period to another.
Determining the closing price is important for traders as it sets the value of a particular currency of a given market before trading starts again the next day at that same market. It can also be used to better understand the market sentiment on a given trading day by comparing it to the closing price of a previous date.
The Bar Chart
The bar chart is also known as the "OHLC" chart referring to the data displayed on the bar which are the open, high, low and close of a traded currency in a specific market in a given period of time. It is important to first determine the period covered on the chart in order to accurately understand the trend.
As opposed to the interconnected lines in the line chart, the bar chart is represented by vertical lines with horizontal dashes on each side. The topmost part of the bar represents the high.? The dash on the upper part pointing to the right represents the close and the dash on the lower part pointing to the left is the open. The lowest part of the bar represents the low. The advantage of the bar chart over the line chart is that it allows the trader to analyze not only the opening and closing of a currency price but the highs and lows as well.
The Candlestick Chart
The candlestick chart, also known as the Japanese candlestick chart is probably the most widely used of the three charts but also the most complicated. Its name was derived from its display representation which resembles an upright candlestick with the body representing the price opening and price closing and the wicks on both ends representing the highest price and the lowest price of the day respectively. The term Japanese implies its origin being the analysis tool used in Japanese trading since the 1700s.
The candlestick chart takes into consideration all the variables that are used in both the line and bar chart. In addition to these, it also includes in the analysis the emotion of traders as reflected on the data of a given trading day. As opposed to the other charts which analyze data of a given day's opening from the closing price of the previous day, the candlestick chart analyzes data from the opening of one particular trading day up to its closing. It also provides for a clearer visual as it uses a color coded approach in representing the uptrend and downtrend of the market.
Because of its combination approach in analyzing trends, it is thought to be the most accurate of the three commonly used chart analysis tools.
Final Thoughts. Unlike other indicators like the RSI and moving averages, OHLC does not provide pointers as to where the price of an asset will move.. Instead, OHLC helps provide an indication as to how the assets are trading and the ranges to watch. External Useful Resources. How to create Candlestick (or OHLC) charts for share prices – The Data School ... OHLC charts conclusion. The OHLC charts are an effective way to measure the price movements. They present more data than line charts, and are similar to the candlestick charts. Various traditional trading patterns can also appear on the OHLC charts. Becoming a successful forex trader can take many years of practice. It is not easy to make a ... In Forex charts analysis, the OHLC shows a range. The time frame tells it. So, if you look at a bar chart Forex traders use on the four-hour time frame, that’s the range. Four hours. It shows the time of the bar. Or, a candle, if you use a candlestick chart. Therefore, an OHLC chart shows multiple bars. And, each bar represents a period of time given by the time frame. As such, a five-minute ... OHLC Chart: Short for "Open, High, Low, Close chart." This is a securities chart that clearly shows the opening, high, low and closing prices for a security. The OHLC is similar to the HLC bar. In addition to showing highs and lows for each period and a tick for the closing price, it also provides a horizontal tick to the left, showing the opening mid-price for the period. HEIKIN-ASHI CHART Meaning "average bar" in Japanese, this is a modified candlestick chart where the open-high-low-close (OHLC) values take the previous period into account to ... websocket pandas interactive-charts matplotlib financial-data financial-analysis technical-indicators ohlc static-charts twelve-data twelvedata ... -rates market-data cfd etf stock-data stock-prices historical-data dukascopy tick-data candlestick-chart commodities ohlc forex-data Updated Sep 13, 2020; TypeScript; valamidev / candlestick-convert Star 14 Code Issues Pull requests [NPM] OHLCV ... Description. Also known as OHLC Chart, Price Chart, Bar Chart.. Open-high-low-close Charts (or OHLC Charts) are used as a trading tool to visualise and analyse the price changes over time for securities, currencies, stocks, bonds, commodities, etc. OHLC Charts are useful for interpreting the day-to-day sentiment of the market and forecasting any future price changes through the patterns produced.
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