Saturday, March 15, 2008

Chart Types

There are three different forms of common chart used to display the currency market movement which include the line chart, bar chart, and the famous candlestick chart. Despite of the same usages traders are very particular in selecting their chart to use in trading due to certain used.

The Line Chart

The line chart simply reflects the market in its general movement as shown below. It is rather more general compare to bar chart and candlestick chart. Therefore traders have less preference in using it for their trading.

The Bar Chart

The bar chart is actually the simplify version of the candlestick chart. Instead of using colored body as In the candlestick chart line the bar line is used to represent high, low, open, and close of the market movement.

The Candlestick Chart

Sometimes it is called Japanese candlestick chart, the most popular chart used by the Japanese traders. In its early days this type of chart was not very popular to the western traders until it is popularized by a book author named “Steve Nison”. Today the candlestick chart is used worldwide by any traders, and in fact it is one of the most powerful tools to aid traders in their technical analysis. In the later stage i will discuss about this powerful charting techniques used by traders to aid them in their trading activities.

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