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Forex Technical Analysis - Chart Types | Forex MT4 Download

25 of May of 2020 17
Forex Technical Analysis - Chart Types

Trading charts represent the price fluctuation of the respective instruments. The information contained in these charts, the analysis of charts, allows the development of trading signals that will be related to the activity of that specific asset.

We can find three types of graphics on this platform:

  1. Line graphs
  2. Bar graphs
  3. Candlestick Graphics

These are the most common charts used by traders and the best known in the currency community.

The profitability of your forex trading operations depends on your ability to make the right decisions at the right time.

When there is an imbalance in the currency market, charts are essential to determine when is the best time to carry out your operations and minimize your losses.

Analyze Forex Charts – Linear (or Line) Charts

The line graph or line graph is a very basic type of graph that displays information in the form of a series of points connected by straight line segments.

This type of graph is often used to visualize a trend over time. Therefore, its line is often drawn chronologically.

You can activate this type of graph by pressing the button that appears in the following image or by activating the ALT + 3 shortcut.

Graphical Analysis - Line Charts on the MetaTrader 5 Trading Platform

Source: EURUSD, Chart H4, MT5 Admiral Markets. Data range: January 7, 2020 to January 29, 2020. Performed on January 29, 2020. Note that past performance is not a reliable indicator of future results.

The effectiveness of the line graph lies in its simplicity: it allows you to easily view the closing prices of a currency pair at a specific time.

The Forex line graph does not tell us about price increases, falls and market prices. It offers much less detail than other types of graphics, for example, Japanese candles.

Analyze Forex Charts – Bar Chart

This chart allows you to quickly see how the price changes in a day. Indicates the volatility of the trading session, the opening price and the closing price.

In Forex bar charts, vertical bars are used to display the price level for a given day.

You can activate it by pressing the button that appears in the following image or by activating the ALT + 1 shortcut.

Chart Analysis - Bar Charts on MetaTrader 5 Trading Platform

Source: EURUSD, Chart H4, MT5 Admiral Markets. Data range: January 7, 2020 to January 29, 2020. Performed on January 29, 2020. Note that past performance is not a reliable indicator of future results.

These charts allow traders to see four prices per day, that is, the lowest price, the highest price and the price levels at the close and the opening of the market. They allow you to monitor and anticipate price developments.

The bar chart consists of four elements:

  • Opening: the opening price of the market. Reflected through a horizontal line to the left of the vertical line
  • Maximum: the highest point on the vertical line
  • Minimum: the lowest point on the vertical line
  • Closing: the closing price of the market. It is symbolized by a small horizontal line to the right of the vertical line

In bar charts, the length of each bar or vertical line indicates the spread price over a trading period or range, for a given currency pair, over a given period.

Analyze Forex Charts – Japanese Candle Charts

There is a specific type of trading chart that traders around the world use for their technical analysis: candlestick charts

What do they represent? Candles represent the price movement in a pre-established time.

You can activate it by pressing the button shown in the image below or by activating the ALT + 2 shortcut.

Chart Analysis - Japanese Candle Charts on MetaTrader 5 Trading Platform

Source: EURUSD, Chart H4, MT5 Admiral Markets. Data range: January 7, 2020 to January 29, 2020. Performed on January 29, 2020. Note that past performance is not a reliable indicator of future results.

Candles offer four important information about the period in question:

  1. The level of opening and closing
  2. The maximum and minimum points

In Forex, candlestick charts are often used in technical analysis to analyze currency price levels.

Let’s go deeper into this type of graph to discover the benefits it offers!

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