The Forex chart is an image that reflects a change in price. Without charts, you won’t have any clue about the market.
Analysis of market data on charts is also called technical analysis in forex.
Charts are plotted in a rectangular system of two coordinates. Time is plotted on the horizontal x-axis, while price, volume, and tick chart are shown on the vertical y-axis.
The period corresponding to a unit interval on the x-axis or depends on the degree of compression of market data. On the tick chart, each change in the exchange rate is displayed. This is the smallest timeframe.
Tick information about transactions is not always available and is not necessary. Therefore, generalized and concise price history for a certain period is most often used.
For any period (minutes, hours, days, weeks, etc.) there are four main values of the exchange rate:
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One price value of a period or all four at a time can be plotted on a chart.
At each point, the exchange rate on the Forex market is presented in the form of a bid/ask quote. The chart can be built on both of these prices and on their average value ([Bid + Ask] /2.) If the chart is based on the bid price, then the ask price is not displayed, and vice versa.
Modern trading platforms allow you to receive market data in real-time and build different graphs on their basis.
The main types of Forex charts are:
A line chart is a straightforward method for displaying price movements. It displays information on a single line using a series of dots.
Line chart
The bar chart provides instant information on price movements for a specified period. Bar charts are often used to track market volatility; the longer the bars, the greater the market volatility. It offers more information than a line chart.
Bar chart
Japanese candlestick charts are very useful graphs that describe the movement of the price of any trading instrument. They can provide helpful information, such as market sentiment or possible trend changes using specific patterns.
Candlestick charts provide information on four key elements in the period under review:
In the forex market, candlestick charts are often used for technical analysis of currency pairs.
Here, we should mention that Japanese candlesticks have multiple patterns like doji, morning star, three crows, hanging man and hammer, and many others.
Candlestick chart
The fastest and easiest way to get free Forex charts is to download a trading platform (MT4, MT5) or log in to webtrader. Tools for technical analysis and forecasts will also be available to you.
Other types of charts are Hieken Ashi, Renko, point & figure, HLC, hollow candles, etc.
Source of content and images: Some of the facts and images have been picked from FXCC’s article How to read Forex charts and Wikipedia Chart pattern.
