TYPE OF FOREX CHART (PRICE CHART)

Let’s take a look at the three most popular types of price charts:

• Line chart
• Bar chart
• Candlestick chart

LINE CHART

What is a Line Chart?

A line chart is the simplest type of chart that draws a line from one closing price on a time period to the next closing price. Given enough price points over time, a line chart forms a unified path that reveals trading patterns and trends upon analysis.
This type of Forex chart provides traders with a clean, easy-to-understand view of the instrument’s price action as it filters out all the noise.

A line chart graphically represents an asset's price over time by connecting a series of data points with a line. This is the most basic type of chart used in finance, and it typically only depicts a security's closing prices. Line charts can be used for any time frame but most often have day-to-day price Changes.

A line chart provides traders with a visualization of the price of a security over a given period of time. Because line charts usually only use closing prices, they cut the noise from less critical times in the trading day, such as the open, high, and low prices. Line charts are popular with investors and traders because closing prices are a common snapshot of a security's activity.

BAR CHART

What Is a Bar Chart?

Bar charts consist of multiple price bars, with each bar illustrating how the price of an asset or security moved over a specified time period. Each bar typically shows opening, high, low, and closing (OHLC) prices, although this may be adjusted to show only the high, low, and close (HLC).

A bar chart is a collection of price bars, with each bar showing price movements for a given period. Each bar has a vertical line that shows the highest and lowest prices reached during the period. The opening price is marked by a small horizontal line on the left of the vertical line, and the closing price is marked by a small horizontal line on the right of the vertical line.

If the closing price is above the opening price, the bar may be colored black or green. Conversely, if the close is below the open, the price dropped during that period, so it could be colored red. Color coding the bars helps traders see trends and price movements more clearly. Color coding is available as an option in most charting platforms.

CANDLESTICK CHART

What Is A Candlestick?

Candlestick charts originated in Japan over 100 years before the West developed the bar and point-and-figure charts. In the 1700s, a Japanese man named Homma discovered that, while there was a link between price and the supply and demand of rice, the markets were strongly influenced by the emotions of traders.

A candlestick is a type of price chart used in technical analysis that displays the high, low, open, and closing prices of a security for a specific period. It originated from Japanese rice merchants and traders to track market prices and daily momentum hundreds of years before becoming popularized in the United States. The wide part of the candlestick is called the "real body" and tells investors whether the closing price was higher or lower than the opening price (black/red if the stock closed lower, white/green if the stock closed higher).