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  1. #1
    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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  2. #1841
    Trader Sascha's Avatar
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    Quote Originally Posted by mexima View Post
    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 .
    professional or not it's up to us who wants to name this candlestick chart with their favorite tittle. to me it's just a regular chart which commonly used and known by most traders in the business and people are able to confirm their trade with the help of candlestick patterns. i don't sense any further advantage for my trading because candlestick patterns are out of my strategy.

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  3. #1842
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    It is not all about the one that is popular, but then again, all about the one that you could make use of and then get to become profitable, experience has made me know that the use of the long term trading is always the best means of trading. The chart suitable for my analysis so far so good has always been the use of the candlestick chart, one of the best and effective approach which I have gotten to have learned.

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  4. #1843
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    Quote Originally Posted by Striker$ View Post
    It is not all about the one that is popular, but then again, all about the one that you could make use of and then get to become profitable, experience has made me know that the use of the long term trading is always the best means of trading. The chart suitable for my analysis so far so good has always been the use of the candlestick chart, one of the best and effective approach which I have gotten to have learned.
    candlestick pattern is not good i think because for trading we need to trade with proper analysis and its about technical, we need to trade with some reasons and it is possible if we work on technical or fundamentals, because if we trade on fundamental its best part for us, market just worked on fundamentals when news will come so its good if we work on them, we can not survive if we do not have proper planning into trading

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  5. #1844
    Trader Silhouette's Avatar
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    Quote Originally Posted by naeem555 View Post
    candlestick pattern is not good i think because for trading we need to trade with proper analysis and its about technical, we need to trade with some reasons and it is possible if we work on technical or fundamentals, because if we trade on fundamental its best part for us, market just worked on fundamentals when news will come so its good if we work on them, we can not survive if we do not have proper planning into trading
    Any strategies can be good or bad to traders depending on their favorite methods of trading and understanding to specific strategies or tools to analyze market. Maybe candlestick patterns aren't for you because you can't get any accurate trading from them or you don't get to know market better through various patterns from candlestick. As long as you have different tools to depend on, it's okay not to use candlestick patterns because many other strategies out there may give us better result that suitable with our character as a forex trader.

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