[PT2021] Types of Charts in Technical Analysis in forex market

Wed Mar 19 11:20:39 EDT 2025

Charts represent one of the major tools of technical analysis. They are
being constructed by using the coordinates price, which is placed on the
vertical axis, and time, which is placed on the horizontal axis. Read also (Non
farm payroll
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)

There are several types of prices that are used on the forex market and are
placed on *technical analysis charts*:

   - Open price - this is the price which is prevalent in the beginning of
   the trade period. The latter can be either a year, month, week, day, hour,
   minute or any amount of these.
   - Close price - this is the price which is prevalent at the end of the
   trade period.
   - High price - this is the price which is of the highest amount during a
   period under consideration.
   - Low price - this is the price which is of the lowest amount during a
   period under consideration.

When a forex trader applies technical analysis, s/he plots charts for
different time period, lasting from one year or more until one minute. When
a longer time unit is used for plotting a chart, the time span used for
analyzing price changes is increased. Additionally, a longer time span is
applied for the purpose of determining the major trend. If the forex trader
is applying short trading, then s/he should use shorter time units.

The following is a list of types of charts that are usually used when doing
technical analysis.

   -
*Line Charts *The prices at a particular time period are plotted and then
   they are connected with lines. The daily chart represents the most widely
   used line chart. Forex traders tend to concentrate on the closing price
   plotted on a chart, because they regard it as the most important one,
   despite the fact that any point in the day can be presented.However, as a
   drawback of daily charts is considered the inability to see the price
   activity for the rest of the period. Additionally, they don't reflect any
   gaps in prices at the joints of the trade periods under consideration.
   Despite these drawbacks, daily charts are useful for visualizing price
   changes and for executing different models and techniques.
   -
*Bar Charts *Histograms represent the separate parts of bar charts. One
   vertical bar presents the high, low, open and close prices for the period
   under consideration so that a histogram can be plotted on the price-time
   coordinates. To the left of the bar a little horizontal line should be
   placed to mark the opening price. On the other hand, to the right of the
   bar a little horizontal line should be placed to mark the closing price.Bar
   charts are beneficial since they provide the ability to view the currency
   range for the time period under consideration. Additionally, it presents
   any price gaps that occur. However, a bar chart drawback is that forex
   traders are unable to view all price changes during the time period under
   consideration.
   -
*Candlestick Charts *Closely related to the bar charts, candlestick
   <https://medium.com/@belajarforexsite/what-are-hammer-and-hanging-man-candlesticks-e3b853e3b77c>
   charts also include four main prices, which are high, low, open, and close.
   Candlestick charts possess some extra interpretations in addition to the
   general ones.The body of a candlestick is formed by the opening and the
   closing price. Whether the opening price was lower or higher than the
   closing one is indicated by the body's filling. The weekly movement
   depicted on a candlestick chart can be followed by using the so called
   shadows. They can be upper shadows and lower shadows. A drawback of
   candlestick charts is their inability to depict all price changes during
   the time period under consideration.

Refference

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https://labpasardesa.ipmafa.ac.id/forum/read/using-the-dollar-index-to-win-fx-trades-235734

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