Types of Charts in Technical Analysis
Types of Charts; Charts are the basic price development indicators that you will use to make a position decision by applying technical analysis tools. With the help of charts, you identify the trend, detect resistance and support, discover patterns, use various analysis tools and finally decide to enter the position. Therefore, charts are the final point of departure in the decision mechanism for every investor.
In this article, what are the Types of charts in Technical Analysis– What is a line chart? , What is a Bar chart and what is a Candlestick Chart ? You will find definitions.
We will describe the examples of Line, Bar and Candlestick Charts and what they are, respectively.
Types of Charts can show any time period you want. You can obtain a constantly flowing graph from the instantaneous tick information, as well as graphs with each point representing a full month and encompassing long years. It is very easy to adapt your chart to the time scale according to the analysis method you want to use and the time period you want to examine. Successful investors may prefer to look at the development of the charts from the smallest time frame to years when making a position decision. For this reason, graphic tables can be easily resized and examined on a time scale.
A technical analysis of the chart is focused on finding out the patterns and market trends.
The trader will be able to do this with the help of various Technical Chart types and having an understanding of the chart functions.
It is imperative to understand how to interpret charts even if the trader has no experience. He has to understand the basics of simplifying a simple technical analysis chart.
This article will focus on the different types of charts that the trader should expect in technical analysis.
It is possible to see three types of chart shapes on our trading platforms. These:
Candlesticks, which are the most used in Forex charts and can give a lot of information visually at the same time, have found a wide range of use. Each candlestick provides the analyst with five pieces of information simultaneously: the direction of the pair, the opening price, the closing price, the highest price, and the lowest price. The timeframe represented by each candle body is equal to the time selection on the chart’s timeline. For example, if the H1 time display is selected, the width of a candlestick on the chart is equal to 1 hour in the horizontal time plane.
Bar charts are a simplified version of candlesticks. Although not as easy to read as candlesticks visually, some traders use these charts. As with candlesticks, it provides five pieces of information at once: the direction of the pair, the opening price, the closing price, the highest price and the lowest price. The line to the left of each bar shows the opening price of the pair, the line to the right of the closing price, the highest point to the upper point and the lowest value to the lower point.
It is the simplest chart form used to observe price development information at a glance. It visually displays a single price information. This chart, which is usually drawn over the closing prices, can be drawn over the opening, lowest or highest price, depending on the ability of the platform you are using. However, in any case, it only refers to a single data. It has a limited area of use in technical analysis applications, except for the cases you want to look at in general by simplifying.
In detail, you can subscribe to tradingview site and see other candlestick chart types.