BeginnerEarly Stages for Beginners8 Topics
Forex Terminology11 Topics
- Major and Minor Currency Pairs
- Basic Forex Terminology
- Pips & Ticks
- The Broker & The Spread
- What is a Lot?
- Stop Loss & Take Profit
- Margin & Leverage
- Retracement & Reversal
- When Can I Trade Forex? Sessions - Market Open and Close
- 3 Types of Analysis (Technical, Fundamental, Sentiment)
- 3 Ways a Market Can Go (Up, Down, Sideways)
Margin & Leverage2 Topics
Personal Psychology Questions2 Topics
Psychology for Beginners7 Topics
IntermediateIdentifying Scams2 Topics
Brokers for Beginners5 Topics
Technical Analysis13 Topics
- Types of Charts
- Understanding Japanese Candlesticks
- Candlestick Patterns For Beginners
- Single, Double & Triple Candlestick Patterns
- Support and Resistance
- Confluences w/ Candlesticks & Support & Resistance
- Counter Trend Trading/ Counter Trend Lines
- Moving Average
- Top-Down Analysis
- Consolidation Trading (Breakout, Retest, Continuation)
Market Structure5 Topics
CompletionRisk Management for Beginners8 Topics
Fundamental Analysis9 Topics
AdvancedUsing Indicators6 Topics
Technical Analysis (Part 2)8 Topics
Types of Charts
Forex charts are graphical illustrations that show us the movement of prices between two currency pairs. Our job as traders is to study price movement through these charts, which will in turn help us identify the best trades to take, as well as manage our risks safely. Charts are visual, and you’re able to customize yours to best suit your style!
There are several types of charts in Forex, but the 3 main ones, which are the most important to know, are:
- Line Charts
- Bar Charts
- Candlestick Charts
A line chart is the most straightforward chart in Forex. It simply connects the closing price of currencies in any given period. So all you see is a historical pattern of closing prices.
Lines charts are not popular, but traders can use them when they’re only interested in historical patterns of closing prices without viewing other cluttering data. So we can say line charts are best for giving us the big picture. Some traders think closing prices are more useful than the open, high, or low prices, depending on their strategies. Another use to these particular charts is being able to identify psychological levels. You can do so by using your rectangle tool, starting at one pivot point and connecting it to the next. You can then change your line chart back to a candle chart. The illustration below will give you an example of how a line chart would look on TradingView.
In the next illustration, you can see how this type of chart could help you in finding your psychological levels! I find it the most useful way to utilize these charts!
Bar charts are a little more detailed than line charts. You can also call them OHLC charts because they tell us the opening price, highest price, lowest price, and closing price. That wasn’t as hard as we made it sound, right? Let’s break it down!
For example, if you are looking at a 1-hour time frame, you will see the price at the start of that hour, the highest and lowest prices during that hour, and the closing price at the top of the hour. You can apply the same understanding when looking at other time frames. Here is an illustration:
The size of bars may increase or reduce depending on the price behavior during that session. A bar chart shows a series of individual bars for each trading session depending on the time frame you are watching. Traders who need more detailed information use bar charts for their analysis. You can set bullish and bearish bars to appear in different colors for easy identification. The illustration below will show you how a chart would look on TradingView.
Now we all know this chart! Candlesticks are the most popular charts in trading. Bar charts and candlesticks bring out the exact price information; the difference is that candlesticks are cleaner and more appealing to the eye. Forex candlesticks show us the high to low trading range vertically, from their highest to lowest points. They have a body like that of a real candle, which shows us the open and closing prices of the session. By studying the different colored bodies, we can depict bullish or bearish sentiments. The wick below or above candlesticks shows us the distance between the highest and lowest prices in relation to the opening or closing price of the session.
If you don’t like the traditional white and black candlesticks, you can change the color to anything you want, as long as it will help you withdraw from the market! For example, we like to substitute bulls with blue and bears with red.