Technical Analysis Charts In Forex

Technical analysis charts can provide you a lot of information about the future price movement in currency trading. Many traders say that a chart can tell a story about the currency pair. These charts give you a complete picture of the price history and this enables you to deduce the future movements of a currency pair.There are different kinds of technical analysis charts in currency trading which will help you to know about the price movement.

Check out the different technical analysis charts in forex given below:

Line Chart

Line chart is one of the important kinds of technical analysis charts in currency trading which represents only the closing prices over a set period of time. It does not provide visual information of the trading range for the individual points such as the high, low and opening prices. This type of chart is particularly useful for providing an illustration of the trend of a stock's price or a market's movement.

Bar Chart

Bar chart is another technical analysis chart in forex. It provides a visual representation of the price activity over a given period of time. It is made up of a series of vertical lines that represent each data point. This vertical line represents the high and low for the trading period, along with the closing price. The close and open are represented on the vertical line by a horizontal dash. The opening price is marked by a small tick to the left of the bar, the closing price is shown by a similar tick to the right of the bar.

If the left dash (open) is lower than the right dash (close) then the bar will be shaded black, representing an up period for the stock, which means it has gained value. A bar that is colored red signals that the stock has gone down in value over that period. When this is the case, the dash on the right (close) is lower than the dash on the left (open).

Candlestick chart

Candlestick chart is another different types technical analysis chart in forex. This chart contains the identical information of a bar chart (opening and closing prices, highs and lows) but it displays it differently. Like bar charts, candlesticks also rely heavily on the use of colors to explain what has happened during the trading period. There are two color constructs for days up and one for days that the price falls.

When the price of the stock is up and closes above the opening trade, the candlestick will usually be white or clear. If the stock has traded down for the period, then the candlestick will usually be red or black, depending on the site. If the stock's price has closed above the previous day’s close but below the day's open, the candlestick will be black or filled with the color that is used to indicate an up day.

After reading through the above technical analysis charts in forex, you will certainly feel more confident in trading forex.