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    Super Moderator RoboForex Trader's Avatar
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    Charts, popular charting styles

    Al traders use charts. Somebody make analysis using charts, somebody follows price action, but every trader without exceptions uses charts. The most popular charting style is candlestick chart. But candlestick chart is not the only charting principle that is used by traders. There are other charts as well. In this article I will tell you about other most popular charts to help you have wider perspective about modern charting principles. Perhaps, it will be useful for somebody and help improve overall performance.

    Tables:

    Historical data is often represented in tables. Bid and ask prices are reflected there. Sometimes, last price (last price traded) is also added there. Some tables also show opening and closing price for some time period. Charts are actually built using data from tables. The minimum price fluctuation is called «tick». Ticks are used for building charts. That’s how ticks look like:

    EUR/USD tiks

    [свернуть]


    Before you go to any charts, I want every trader to remember one thing – all charts are sort of indicators. They don’t look like moving averages or Bollinger bands, but they are indicators, because they transform data flow into convenient visual way for the sake of simplicity.

    Line chart

    The lowest timeframe possible in the market is «tick chart». It’s not very useful though because it contains much ambiguous information that may be not relevant for a trader – not too many ticks can be shown on the screen of a trader. To see price that was traded on the market 1 year ago, you should go back too many ticks. Also, quantity of ticks can be overwhelming for analysis.

    EUR/USD tiks

    [свернуть]


    As you see, this chart contains just 10 minutes of information. Every 10 minutes you will see completely new data. You can though build line chart using higher timeframes, but it will not be very useful that’s why they are not very popular. In popular trading software MT4 it’s possible to see line charts with very big timeframe, up to monthly chart. In MT4 line chart is built using closing prices of the time period. On H1 line chart will be built using closing prices for every hour. In some trading platforms charts can be built using opening prices or high/low prices.

    Bar chart

    Many traders are familiar with bar charts because it is built in MT4 platform, and default settings of the platform are so that you have default bar charts after software is installed. Before candlesticks have become so popular, bar charts were commonly used in trading community. It was easy to draw and it was convenient before computers appeared. Bar charts are also used today by those who want to have more data on limited space (Bar chart consumes less space than candlestick chart). Disadvantage of bar chart is absence of colour. While on candlestick chart you can immediately see where rising and falling candlestick is, on bar chart you don’t have this opportunity.

    EUR/USD hourly chart

    [свернуть]


    «X0» Chart

    It’s also called point-figure chart. X shows growth, 0 – decline. Box allows to set point size. Recommended parameters depend on currency pair, normal size is 25 – 50 points per box. «Reverse» is parameter that shows another box when price shows momentum. For example, reverse equal to «3» means that price will go 3 boxes long, then new box will start drawing to the opposite side. Disadvantage of this chart is absence of time scale. You can attach it, but it will be useless. There is only one timeframe on this chart. To get perfect «XO» chart, you should use tick data.

    USD/JPY ХО Chart

    [свернуть]


    Renko chart

    Like XO chart, Renko charts don’t have time scale and are built from different colored blocks. Every block is equal to quantity of pips set in box. Unlike XO Charts, Renko chart is build using closing prices of given timeframe or highs/lows levels. Renko charts are very visual for identifying trend.


    EUR/USD Renko Chart

    [свернуть]


    Kagi chart

    This unconventional chart is build upon lines named «Yin» and «Yang», using closing prices for given interval. Though, Kagi chart can be built upon high/low prices like any other chart. Kagi chart is used for identifying resistance/support lines. Trends are also very visual with Kagi chart.

    • Solid line – Yang
    • Solid line – Yin


    «Yang» line draws zigzag lines in stair stepping mode. Every stair is called «shoulder». Every shoulder is always higher than previous. If next level becomes lower than previous line, chart transforms into «Yin» line and shows reversed stairs using the same principle. This stair is called «waist». Every stair is always higher than previous, if stair goes down, chart transforms into «Yang».

    EUR/USD Kagi chart

    [свернуть]


    Candlestick chart

    Japanese candlesticks are described in book Candlestick analysis by Steve Nison. For now, this is the most popular chart among traders. Literally every trading platform (that has charts) has this type of chart. Candlesticks have gained popularity because candlesticks can form plenty of combinations (formations) and patterns for technical analysis. They have only one disadvantage: to validate candlestick formations, trader should deal with closed candles. As data changes, candle can turn from black to white and vice versa. Especially it is fair for higher timeframes. Also, candles have shadows to both sides. Those shadows show high and low for the period.

    EUR/USD candlestick chart

    [свернуть]


    The most popular trading software Metatrader4 contains 3 basic types of charts: candlestick, line and bar chart. Other charts can be shown as additional indicators. In reality, there are numerous types of charts, that we might be not familiar with. Charts are indicators, they transform data flow in visual and convenient way. Chart is not a «holy grail» for a trader, it’s simply a tool, that can help trader increase the odds of profitability.

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    cutiekc, its good no doubt but we can not say other patterns are not good, other patterns are also good just we need to make sure we are doing well, we are doing on base of experience, if we have experience we can survive but if we do not have experience we can not survive in end we will lose, so candle pattern is good but i take it as supportive way but in other side i prefer to use fundamental trading ,its best way for us to earn something well

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    Registered user Rylai's Avatar
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    Candlestick and line has become my two familiar charts i'm always using for my trading. with candlestick chart, i use it to look out for different patterns and apply them well through big time frames. i always look for reversal trading with candlestick patterns and the result mostly satisfying. line chart provides me with clear movement to give me confirmation about the patterns i'm trading with candlestick.

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  4. #1833
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    whatever we have of types of the charts i think that the best type of them all is the candlesticks pattern . for many reasons . first of them it gives a clear view to the opening and closing areas for the price every sigle candle . also iot expresses some of the data according to the price action trading style . which can be regarded as a strategy in itself

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    Registered user mexima's Avatar
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    every chart has their own important like i mostly use candlestick chart which is also called bar chart because it is best for trading from my side how ever alot of trader trade on line chart as well because that is best to trade on trend and to trade the over views of market in less then one minute.

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    Registered user cutiekc's Avatar
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    Quote Originally Posted by naeem555 View Post
    cutiekc, its good no doubt but we can not say other patterns are not good, other patterns are also good just we need to make sure we are doing well, we are doing on base of experience, if we have experience we can survive but if we do not have experience we can not survive in end we will lose, so candle pattern is good but i take it as supportive way but in other side i prefer to use fundamental trading ,its best way for us to earn something well
    Well, the thing is that we have to talk about the one that we have been making use of which has been profitable to us, that is what we should follow when trading with. Trading the market needs that the trader be specific in what they do. Before you can become profitable and successful, you should be disciplined and then you should focus on just one trading approach, that is how to succeed.

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    Registered user Toyen's Avatar
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    Quote Originally Posted by mexima View Post
    every chart has their own important like i mostly use candlestick chart which is also called bar chart because it is best for trading from my side how ever alot of trader trade on line chart as well because that is best to trade on trend and to trade the over views of market in less then one minute.
    You might be right that every charts have their own importance, we have to likewise know that the chart of the candlestick is the best. There are many of them, but how many traders are using other charts apart from the one of the candlestick chart? That is what i would like you to know. And for traders to trade the candlesticks chart currently, they can use a good trend trading strategies for it, that is the best i know.

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    Quote Originally Posted by Toyen View Post
    You might be right that every charts have their own importance, we have to likewise know that the chart of the candlestick is the best. There are many of them, but how many traders are using other charts apart from the one of the candlestick chart? That is what i would like you to know. And for traders to trade the candlesticks chart currently, they can use a good trend trading strategies for it, that is the best i know.
    Yes sir we need to actually know the strengths and weaknesses of the time frames we are using and most importantly focus to grab a strong setup. We should ensure a relaxed mind during trading and this is possible when we keep the risks well managed and follow a good strategy. Many great traders are great because they have breakthrough ideas and techniques that they developed over their experience.

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  9. #1838
    Registered user mexima's Avatar
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    Quote Originally Posted by Rylai View Post
    Candlestick and line has become my two familiar charts i'm always using for my trading. with candlestick chart, i use it to look out for different patterns and apply them well through big time frames. i always look for reversal trading with candlestick patterns and the result mostly satisfying. line chart provides me with clear movement to give me confirmation about the patterns i'm trading with candlestick.
    i think line chart is just use to see the trend of the market how ever candlestick chart is on the professional chart and important in the analysis section because in the candlestick chart every candle will tell you about the market condition more over it will give the signal for future market as well. i only trade on candlestick chart with no indicator basically it called NUDE charts.

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  10. #1839
    Registered user sniper007's Avatar
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    Quote Originally Posted by mexima View Post
    i think line chart is just use to see the trend of the market how ever candlestick chart is on the professional chart and important in the analysis section because in the candlestick chart every candle will tell you about the market condition more over it will give the signal for future market as well. i only trade on candlestick chart with no indicator basically it called NUDE charts.
    From what I have learned, I think the line chart is been used to get the support and resistance, you know the support and resistance are of two types, there is the candlestick open and close price and then also there is the line chart, so to be the kind of trader who has a good analysis been done, I think some of the traders ends up making use of the line chart to get the support and resistance as well.

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  11. #1840
    Registered user mexima's Avatar
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    Quote Originally Posted by thenight View Post
    I also using candlestick chart. It's not only the most popular charting style but I think it's the best charting style since it's simple and it also provide highest price and the lowest level of the price from specific time frame. By using candlestick chart we can seeing market movement by time to time and se can easily make a support and resistance line based on that.
    candlestick chart is professional chart because it has every thing which every trader want like it already install the indicator now experience will tell the correct signal of that indicator like pin bar sell the maximum profit taken by big fishes and doji means the buyer and seller has get out of the market and price action candle like every candle will indicate you some thing .

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