Mon. Nov 28th, 2022

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3 Types of Forex Charts and How to Read Them?

2 min read

There are differing types of forex charts which may help make the reader to understand the availability and demand within the market.

A forex chart graphically depicts the historical behavior, across varying time frames, of the relative price movement between two currency pairs.

A forex chart, essentially, allows a trader to look at the past, which, consistent with technical analysts, are often a predictor of future price movement.

The most common sorts of forex charts are line, bar, and candlestick charts and therefore the normal time frames that the majority platform’s charting software provides range from tick data to yearly data.

Forex charts are available different forms, but the three hottest sorts of chart are line charts, bar charts and candlestick charts.

LINE CHARTS: The simplest of them all, line charts draw a line from one closing price to the next. When strung together with a line, they show you the rise and fall of a currency pair over time.

BAR CHARTS: Bar charts are a touch more complicated but perfect for once you need more information. They show the opening and shutting prices of a currency pair, also because the highs and lows.
The bottom of a vertical bar displays the lowest traded price for that period, while the top shows the highest. The vertical bar indicates the currency pair’s overall trading range. On the left side of a bar graph is that the horizontal hash, which shows the opening price. On the proper may be a horizontal hash showing the price.

CANDLESTICK CHARTS: Candlestick charts use a visual representation of price broken down into two main parts, the body and the wick. These pieces meet in a style that looks like a candle, thus the name of the chart style.

The wick, illustrated by a thin line at the top and bottom of the body, shows the highest and lowest prices traded over the time frame. The body of the candle, the thicker middle portion, shows the open and closing prices during the time frame.

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