Types of charts. Bars, Candlesticks.
Forex Technical Analysis is a method of price forecasting based on the price history. Charts for Technical Analysis Forex built in two coordinates, the price and / or tick volume (usually plotted on the vertical axis) and time (usually plotted on the horizontal axis).
Trading period or scope (timeframe) is called an interval of time used for plotting.
As the time scale of price charts have traditionally used the following trading periods: month, week, day, 4:00, 1:00, 30 minutes, 15 minutes, 10 minutes, 5 minutes, 1 minute, tick.
Teak is a single change in the price a market maker market passed the form of new sales and purchase prices (Ask and Bid).
To construct the graphs (except for the tick) the following data types:
the opening price of the period (open) - price in Forex, established at the beginning of the trading period (since the prices are always two (Bid and Ask is usually used Ask + Bid / 2);
closing price of the period (slose) - price in Forex, established at the end of the trading period (since the prices are always two (Bid and Ask), in most cases the Ask + Bid / 2);
period, the maximum price (high) - the highest price in Forex, developed over the period (typically Ask);
period, the minimum price (low) - the lowest price in Forex, developed over the period (usually Bid);
tick volume (tick volume) - the number of ticks (changes in the prices of market-makers) for the period.
Consider the basic types of graphs
A. Tick Chart (Tick chart)
Tick chart is a graph of the smallest scale - single quotation price. Since, unlike in the Forex Market there is no information on the number of transactions and volume, tick chart is a Bid and Ask quotes market makers market.
The upper part of each line is a quote - Ask, and the bottom - Bid. Tick Chart Forex traders used largely for market analysis and to identify specific points of entry into the market when a decision about entering the market (with all the relevant parameters) has already been made.
Two. Line Graph (Line Chart)
To construct a line graph the prices used in most cases the closing price (Close), in more rare cases, use the opening price (Open), the highest price for the period (High), the minimum price for the period (Low). Sometimes use synthetic versions of prices, such as Median Price ([High + Low] / 2) or Typical Price ([High + Low + Close] / 3).
It is believed that this plot has some significant drawbacks. For example, the price line graph is not possible even a rough estimate of what was happening inside the trading period (much is falling and prices rose in the period, what was the relationship between the price range of trade and the closing price). Another drawback of the conventional line graph is the inability to see the price gaps between trading periods (gap - gaps), while on the Forex, they are rare. The advantage of a line graph is that it does not give information on the screen, which many traders may be considered excessive. It is also believed that the line graph is useful for the trade figures of technical analysis - patterns.
Three. The graph bars (Bar chart)
Note: also used the name of the graph of interval histograms.
Here is an example of a base period of 1 hour. Vertical line on the chart bars denote the range of shopping hours (range, where at this hour, there were quotes). The lower point of the vertical line - is the minimum price within a given hour - Low. The upper point of the vertical line - is the maximum price, which it reached within a given hour (High). The bar on the left indicates the level of prices for the opening period (early period) and is called the Open. In this case, the beginning of an hour. The bar on the right shows the level of prices at the close of the period (late period) and is called the Close. In this case - is the end of an hour.
If the left bar, right above this means that prices at the beginning of the base period were higher than at the end, in other words, the market price fell. If you lower the price rose. Weaknesses: Despite the fact that the bar chart allows you to see the range of price changes within the period, he can not see, what were the nature of price movements within the period. To do this, switch to smaller timeframes.
4. Candlesticks (Japanese candlesticks)
Candlestick charts are quite similar to the bar chart, but as many believe, is more convenient for visual perception. Like the bar chart, he, too, is based on the price open, high, low, close.
The distance between the opening and closing price of the candle body forms (rectangle - dzhittay), which is filled depending on the ratio of opening and closing prices. Traditionally, the following applies: if the opening price is above the closing price (ie, the price fell for the trading period), the candle body is painted a dark color, but if the opening price below the closing price (the price for the trading period has increased), the body is painted candles in a light color or painted over.
Note: In most programs, technical analysis, candlestick body color can be changed, so the combination may be others, such as red and green, etc.
The distance between the body of the candle and the maximum price of the day is drawn as a vertical line, called the upper shadow candle (uwakage). The distance between the body of the candle and the lowest price period is also depicted as a line is called the lower shadow candle (shitakage).
As well as bars on the chart, candlestick chart can not see the character of the movement within the trading period, and shows a range of price fluctuations. There are other types of graphs.
Volumetric Candlestick (Candlevolume)
Equivolume charts (Equivolume)
Punktotsifrovye graphics (Point and Figure)
Graphs breakthrough 3 lines (Three-Line Break)
Renko charts (Renko)
Kagi charts (Kagi)
Often on the vertical axis (price) is not used arithmetic and logarithmic scales. It has spread in the analysis of long-term trends, the price of currencies on the Forex can vary by tens of percent. On an arithmetic scale, the distance between tick marks on the axes are the same price, but on a logarithmic scale, the distance between tick marks represents the same percentage price change.