Charts exist in order to help displaying the foreign exchange quotes. There are several types of charts seen being used in the Forex market. These charts will be used further for the technical analysis as well as in decision making process. These charts will be built with two coordinates of tick and/or price (vertical axis) and the time period (horizontal axis). With the exception of the tick ones, these are the kinds of data used in building charts for Forex.
- Open Price* is formed at the opening of trading session.
- Close Price* if formed at the closing of trading session.
- Low Price* is lowest price reached in a trading session.
- High Price* is the highest price reached in a trading session.
Timeframe or trading session or trading period is used for the charts. The timeframe can be from 1 minute all the way to 1 month and etc. There are several types of charts but the mean of the chart will be similar. It is to show the available information in the easy way.
The chart has vertical line connecting the bars. This type of chart has the great advantage of being able to show all price changes within trading interval. Shorter strips on left side show pen price while the right one shows the close price. One bar shows the entire changes of price in an interval. Several bars form the movements of price.
This chart is built in the similar way with bar charts. It featured candle body. The color will be dark like black is the close price is lower than open price. The dark color is referred as “bear”. The candle body will remain white if close price is higher than open price. The white color is referred as “bull”. In Japan, the candle’s color is red instead of white.
There are shadows coming from the candle’s body. These shadows are vertical lines divided into uvakage or upper shadow that shows high price of particular period and shitakage or lower shadow that shoes low price of particular period. Sometimes, upper shadows are referred as “hair” while the lower ones are referred as “tail”.
This one chart looks like curve and only uses the close price of previous period (that has automatically become open price of next period). It is good chart for short period as no information related to open prices can be seen thus the ratio of price ranges in the period is referred as missed information. That being said, some traders think that information always useful no matter how useless it may seem. This also simplifies the trading process of traders.
It shows unit price changes and the graph has smallest scale. It’s a real time chart that will continue to change every time there is a change or rate. Upper part shows ask price while the lower part shows build price. Tick chart is not used to make an analysis but will be used to determine the very moment when entering the market as all other parameters already been defined.