Bar Chart

Category: Finance, Currency Trading.

Kinds of prices and time units.

The following kinds of currency prices represented on charts are being distinguished on Forex: open- a price at the beginning of a trade period( year, day, month, week, minute or a, hour certain amount of one from these units) ; close- a price at the end of a trade period; high- the highest from prices observed during a trade period; low- the lowest from prices observed during a trade period. Charts for the technical analysis are being constructed in coordinates" price( the vertical axis) - time( the horizontal axis) ". Providing the technical analysis one uses charts for different time units- from 1 year or more till 1 minute. For the short trading charts for less time units are more suitable. The bigger is a time unit applied for the chart plotting the bigger is a time span to analyze price movements and to determine the major trend by means of the chart. Line chart.

The most popular line chart is the daily chart. The line chart is plotted connecting single prices for a selected time period. Although any point in the day can be plotted, most traders focus on the closing price, which they perceive as the most important. Nevertheless, line charts are easier to visualize. But an immediate problem with the daily line chart is the fact that it is impossible to see the price activity for the balance of the period as well as gaps- breakups in prices at joints of trade periods. Also, technical analysis goes well beyond chart formation.

Bar chart. In order to execute certain models and techniques, line charts are better suited than any of the other charts. The bar chart consists from separate histograms. The opening price usually is marked with a little horizontal line to the left of the bar. To plot a histogram in coordinates price- time the points responding to high, open and close, low prices for a time period analyzed should be marked on the one vertical bar. And the closing price is marked with a little horizontal line to the right of the bar. An advantage of this chart is that, the bar chart, unlike line charts is able to plot price gaps.

Bar charts have the obvious advantage of displaying the currency range for the period selected. Hence, it is impossible to see on a bar chart absolutely all price movements during the period. The candlestick chart is closely related to the bar chart. Candlestick chart. It also consists of four major prices: high, open, low, and close. The latter is possible thanks to the convenient visual observation of that chart. In addition to the common readings, the candlestick chart has a set of particular interpretations.

The opening and closing prices form the body( jittai) of the candlestick. Current standard electronic displays allow you to keep it blank or select a color of your choice. To indicate that the opening was lower than the closing, the body of the bar is left blank. If the currency closes below its opening, the body is filled. The intraday( or weekly) direction on a candlestick chart can be traced by means of two" shadows" : the upper shadow( uwakage) and the lower shadow( shitakage) . In its original form, the body was colored black, but the electronic displays allow you to keep it filled or to select a color of your choice.

Just as with a bar chart, the candlestick chart is unable to trace every price movement during a period s activity.