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  1. #1
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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. #11
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    Quote Originally Posted by niloy View Post
    For me and my trading Japanese candlesticks chat is the best trading chat i ever found on meta trader 4 but also Line chat is my first using chat which used by me long time. In Japanese candlesticks chat a trader easily analysis market movement.
    I also agree with you that candlesticks chars is very easy to understand market movement. I prefer candlesticks charts than bar and line chart. But I can say that no pattern can give us concrete idea about further market movement, we can take help of fundamental analysis and news to assume more accurate further movement.

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  3. #12
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    Candlestick is most common chart using in trading world and it's simple to understand but so much profitable and have so many analysis opportunities and working with many strategies we can enjoy the and use many methods. 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.

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  4. #13
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    the famous chart and all the traders use it candle chart it's very good because it give us the bullish and the bearish very clearly and there are many traders depend on the candle it self and consider it as strategy but we must beside using candle pattern we must use many tools because the candle change it's shape and not fix on one shape

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  5. #14
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    Candle stick is the most widely used chart in the Forex trading. I think it's patterns of the candle stick that make this chart type most popular. Even new traders really depend on patterns, most of traders can make money while considering support and resistance along with the patterns of this chart type.

    I believe that this chart type is most easy to understand and it's also easy for decision making specially with this char type price behaviors become easy to understand.

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    Quote Originally Posted by ishtiak View Post
    In my opinion Candlestick charts are flexible, because candlestick charts can be used alone or in combination with other technical analysis techniques. A significant advantage attributed to candlestick charting techniques is that these techniques can be used in addition to, not instead of, other technical tools. In fact this system is superior to other technical tools. Candlestick charting techniques provide an extra dimension of analysis.
    you are bit correct about candle stick chart patterns, but i do not agree that they are more superior to other indicators because they can not indicate divergence, or volatility and they can not even point out oversold or overbought market condition. Candle stick pattern can not be used on their own

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  7. #16
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    its depend on a trader whose doing trading i think charts has great importance in this business because this business is done only by understanding charts it is not difficult but hard work is necessary.

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  8. #17
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    technical traders like me can never enter into any trade if they do not see the reason for doing so clearly from their charts, but those who are trading with the fundamental analysis can definitely trade without the help of the charts because what they need to know is that there is a positive or negative news about the currency pair they are trading and then they will make their decisions based on this .

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  9. #18
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    i prefer to trade with candlestick chart because there are many shapes of these candles are helpful and let the trader to predict the future movement especially if these shapes appear on the higher time frames which will be more strong,i prefer also to trade with renko chart because it is good for trading and help the trader to trade correctly and make money

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  10. #19
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    yes there are many kind of chart but i think candlesticks chart are the most popular and dependable chart for getting any trading signal.there are two types of candles and for that we can easily get any idea about the market trend from this chart.

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  11. #20
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    This is a good elaboration on the trading charting in the market. I only know of candlestick, line chart and bar chart before now. But i have being using the candlestick ever since i started the trading. It is the one that the master that taught me the market is using too. This is the reason i think it is the best for all traders.

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