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Types of Forex charts

forex market chart

In order to become a successful Forex trader and gain profit you should be aware of reading the charts that is very important and essential factor for any trader.

The advantage of Forex chart before the ones used, for example in stocks day trading is their easiness for reading and understanding. These charts show the relations between the slow movement of a certain country's economy with daily situation concerning company reports, analysts from Wall Street and the demands of shareholders.

More differences of Forex charts from the ones of the stock market are long-lasting tight ranges of trading and keeping strong trends. Forex market may be volatile as well but even then, it is still more stable. There are only few preferred currencies worth trading in FX market unlike thousands of stocks demanding analysis in the stock market.

There are three kinds of the most famous charts exist in the FX market: Line chart chronologically represents the fluctuations of currency pair exchange rates by connecting closing prices with the straight line. Bar Chart gives the information of the currency pair performance through vertical bars located in certain intraday time distance (say, 30 min). Each of the bar's 4 "hooks" represents opening, closing, high and low (OCHL) rates accordingly for the period of time. Candlestick Chart is close to bars, but presents OCHL values as candlesticks having wicks at both sides. The candlestick remains "solid" when the opening rate exceeds the closing one and it turns "hollow" when the opening rate is lower than the closing.

There are also such types of charts as:

  • Volumetric Japanese candles (Candlevolume)
  • Equivolume charts
  • Point and Figure, as named XO, or crosses-zero
  • Three-Line Break
  • Renko charts
  • Kagi charts

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