Forex Trading Charts

Forex Trading Charts

There are many platforms developed for traders which offer many special features and services. Using a trading platform and a forex trading chart traders try to analyze the market and to identify any possible trends or price movements.

In this article, we will state the main types of forex charts.

Line Charts

The simplest form of forex charts is the line charts. They provide a basic overview of price trends by displaying a single line connecting the closing prices of each period. Line charts are the most basic form of charts and lack detailed information.


Bar Charts

Bar charts display information for each period as a vertical bar. Traders can also check some additional information for Open-High-Low-Close (OHLC) prices for each bar. The top part of the bar represents the highest price reached at each period, while respectively, the bottom part of the bar shows the lowest price reached. The small horizontal line on the left side of the bar indicates the opening price and the horizontal line at the right side the closing price.


Candlestick Charts

Most traders use candlestick charts since they display a lot of useful information. Like bar charts, each candlestick represents price movements during a specific period.  The ‘’body’’ of a candlestick is colored in a way to depict if the price increased or decreased at that period. Therefore, we select different colors for bullish and bearish candles. The top and bottom of the body shows the opening and closing prices, while the thin lines above and below the ‘’body’’ indicate the highest and lowest prices reached. These thin lines are called "wicks" or "shadows".


Point and Figure Charts

Point and figure charts focus only on price movements while ignoring time and volume. They use Xs and Os to indicate upward and downward price movements.


Traders should know that there are many other chart types (e.g. Renko, Heikin-Ashi, etc), which create different representations of prices using specific filters and calculations.

Each trader should select the trading chart which best suits his/her trading strategy, style and preferences. It is also very common to use a combination of different chart types for better analysis and decision making.

Categories / Tags: Forex, Forex Trading, Trading Educational Articles

Related articles

Forex Trading Psychology and Behavioral Finance

Having a vast knowledge of forex and the financial industry is not enough to make you a successful trader. As many things in life, psychology is the key!

What is a pip - pip’s value and pip calculations

The "percentage in point" or "price interest point" (PIP) is one of the most basic concepts in forex trading. In forex trading, a pip is the smallest price movement which can be recorded in a currency pair.

Forex scalping and scalping trading strategies

What is scalping in forex? This question is quite easy to answer, but it has two very important factors as requirements: Leveraged trading and as tight as possible spreads. The best forex trading scalping strategies use leverage which enables traders to borrow capital from a broker in order to gain more exposure to the forex market, using at the same time only a very small percentage of their full asset value.

Fibonacci - Forex trading and Retracement levels

The Fibonacci sequence is the art of mathematics, where each number of the sequence is the sum of the two (2) preceding numbers (e.g. 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, etc). In forex trading, the Fibonacci indicator is one of the most popular tools used by traders to identify potential levels of support and resistance on price charts.

What is Algorithmic trading and is it profitable in forex?

Algorithmic trading is also known as automated trading by computers which are programmed to take certain actions in response to varying market data and conditions.

Fundamental Analysis in forex trading

Fundamental analysis is a comprehensive approach which requires a deep understanding of accounting, finance and economics. At the forex trading sector, this method is used mostly for evaluating and predicting the value of currencies. This can be done by analyzing various economic, social and political factors that can influence a currency’s supply and demand.

What is Carry Trading and how can it be profitable?

Carry Trading is a popular investment strategy in financial markets and especially in the foreign exchange (forex) markets. The main idea behind this strategy is to borrow money in a currency with a low interest rate and invest it in a currency or any other asset with a higher interest rate. The profit from the interest rate differential is the goal of Carry Trading strategy.

Price Action Trading in forex

Price action trading is a popular trading strategy used in financial markets and it is best to be applied to short- and medium-term investments, rather than long term ones. The main characteristic of this method is that it analyzes, and places trades based on the price movement of an asset and its chart.