Graphs are the sine qua non of technical analysis on the Forex market. They form the basis for our analysis of information. By means of technical analysis we have information about the trend of an investment instrument and we buy or sell accordingly. We end up making money. We analyze and find this trend by using price graphs. For this reason, Forex charts are very important for an investor.
It is also beneficial to learn graphics as a starting point for technical analysis. You need to learn your basics, the meanings of the graphics, and the given information. With the information provided by a price graph, you can even simply predict what direction of the investment vehicle will be. You can also get the necessary signals by applying the analysis. On MetaTrader trading platforms where you perform your Forex trading, you can easily open these charts and examine the required ranges.
Forex charts are possible to distinguish 3 groups; line, bar and candlestick charts. Among these chart types, the most commonly used one is candlestick charts. With these graphs you can determine the support and resistance points, the direction of the prices. At the same time you can see instant prices from the price graph of an investment vehicle, as well as yearly, monthly and weekly status.
Now let’s take a look at the chart types one by one:
What is Candle Graphic? How to read?
The most commonly used chart type is candlestick charts. That is why it gives more information than others. It got its name because likes candle. Each candlestick gives information about the direction of the parity, the opening, closing, highest and lowest price, at the specified time interval. They are discovered by the Japanese and provide information about supply – demand. The difference between candlestick charts and bar charts is that their drawings are different and easier to read. The decline or rise in the bar graphs is understood by the protrusion next to the bar, while the candle charts show that the body is in a different color. In this way you can see the course at first sight. In the Forex market, candlestick graphic is the most popular because the most detailed technical knowledge is given by it. We can show the information given by a candle chart as follows:
What is Bar Graph? How to read?
It is a simplified form of candlestick charts and gives the same information. But bar charts are less preferred because candle charts are easier to read. Technical analyzes are more suitable than line charts and are suitable for trend analysis. On a bar graph you can see the opening – closing, highest – lowest prices in the range determined by the investment instrument and you can see the direction of the parity.
Unlike the candlestick charts, there are no bodies and you learn from the short lines drawn on the right and left sides of the bars where the price goes up or falls up.
If the line on the left of the bar is lower than the bar on the right, you understand that prices increase. In the same way, if the line to the right of the bar is lower than the left side indicates that prices decreases. Thanks to this, you can determine the trend easily.
What is Line Graph? How to read?
It is the simplest and most basic graphic variety. They are plotted according to the closing price and they are formed by marking each period periodically. Usage areas are limited; because they only contain a single piece of information. They are often used to give a quick look at price changes. Line graphs give information about the closing price only when they are plotted.