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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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  2. #21
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    Please who can one gain access to these different chart pattern you've stated,am only awear of the bar chart,line chart and candlesticks.please update me.

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  3. #22
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    may i ask that no brother indicator, the indicator looks like he has a good and easy to read and use, please include a link to download it if deign brother, and please give rules to use any existing indicators, ranging from minimum capital and time frame that will be used, i'm sure many who want to use existing indicators.

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  4. #23
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    Quote Originally Posted by HAMEDFX View Post
    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 .
    yes, for them who use fundamental analysis, maybe they can ignore it, but for me, as my point of view, it is good if we can combine them for trading between technical analysis and fundamental analysis, because they will complete each others for disadvantages and advantages from them, although i am a scalper , and do trading based on analysis, then i pay attention to see fundamental analysis, because it is useful to maximize our performance during in the market or avoid unwanted situation,

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  5. #24
    Trader Azis Muslim's Avatar
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    Quote Originally Posted by sohel74 View Post
    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.
    We can also get trading signal using different type of chart like line chart. Now I use that chart too besides candlestick chart. I use line chart to indicate the price volume without showing tails like candlestick does. I use this chart to draw trend line, fibonacci, channel, or horizontal line to analyze the market manually without using indicators. I use candlestick to enter and exit the market.

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    Trader Nizar's Avatar
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    Quote Originally Posted by Azis Muslim View Post
    We can also get trading signal using different type of chart like line chart. Now I use that chart too besides candlestick chart. I use line chart to indicate the price volume without showing tails like candlestick does. I use this chart to draw trend line, fibonacci, channel, or horizontal line to analyze the market manually without using indicators. I use candlestick to enter and exit the market.
    line charts look more like moving averages to me,and i can not determine the size of market activity during a particular time using this type of chart,for example you can not determine daily high or low by line only and you can not see if the last hour was bullish or bearish clearly,but by candles you can know all that just by observing candle colors.

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    Bend your view to the charts, not the charts to your view

  7. #26
    Trader martyn's Avatar
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    Candlestick chart is a chart of the most popular because it displays prices more easily and complete. But candlestick consuming more memory usage thus making prices often move more weight, so I am more frequently trading using bar chart compared with candlestick .

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  8. #27
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    Do you know that the reliability of the trading result you are getting in the market depend on the chart pattern that you are using, there are many ways of doing trdaing that requires you to know your ground on trading analysis. You can find this better in your trading skills and the psychology of doing it. I see a better trdaing methods with the candlestick trading myself.

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  9. #28
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    Quote Originally Posted by martyn View Post
    Candlestick chart is a chart of the most popular because it displays prices more easily and complete. But candlestick consuming more memory usage thus making prices often move more weight, so I am more frequently trading using bar chart compared with candlestick .
    I am agree with you brother, candlestick charts are much important for us in forex trading market because candlestick charts gives us more understanding of forex business and it is the strategy which is used by most of the professional forex traders in trading and able to earn more money from it.

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  10. #29
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    Quote Originally Posted by featurelion View Post
    I am agree with you brother, candlestick charts are much important for us in forex trading market because candlestick charts gives us more understanding of forex business and it is the strategy which is used by most of the professional forex traders in trading and able to earn more money from it.
    candle stick can help us to read the trend in the market after all. Surely that we can know when the price is going to fall suddenly and whether they will fall pretty hard or even fall down slowly. But even so, unless we have a lot of knowledge before deciding the trend from the candlestick alone, we will need a lot of experiences first.

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  11. #30
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    On trading for long term or plain chart trading, i like to use bar chart for my trading, i do not need to zoom the trading chart very well, the bar chart will do it for me It makes more sense of the trading pattern on the naked trading than any other trading chart i have seen. Except that i do not do trade this patten all the time.

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