Charts show the world the price action traders. Today, most
traders start with candlesticks, but they are relatively new for traders in the
Western Hemisphere. The other options have clear functions that will help you
to see the forest for the trees and to trade more effectively. This article
will show you the methods that are commonly used and explain why some traders
prefer to prefer a particular chart structure over another.
The charts are the starting point of any technical or based
on the price action trader. A price chart is simply a graphical representation
of the course over a period of time. Nevertheless charts help the traders to
question the market, so that a clear trend or a trade opportunity is detected.
History of the charts
Charts there since the 18th Century, when the rice traders
began in Tokyo to bring the course to paper. Especially for the purpose, with a
view of the course over a period of time to identify patterns, from which you
could benefit. Served in their honor that the Japanese technical analysis in
the form of candlesticks today is still one of the most popular forms of price
movement analysis.
As the technology at the turn of the 20thCentury emerged,
the ticker tape the mainstay of brokers and professional traders has been.
Since that time there were no computers, the traders were reading off the
numbers from the band and recorded by hand their own charts to detect when a
breakout take place or a clear pattern would be present. A common saying was
that an opportunity was ripe, when the band behaved unusually.
" I never argue with the tape. To be angry on the
market will not do any. "
-Larry Livingston (Jesse Livermore), Memoirs of a stock
exchange operator.
Nowadays computers allow the traders to access any type of
chart in seconds. The goal of any trader on any chart is to use the chart,
which is most comfortable for them to identify High Probability occasions. The
depiction of the charts can assume all sorts of shapes, from a line or a bar,
to a candlestick.
Chart options and their benefits
Candlesticks
Candlesticks help the traders to recognize the feeling
behind the daily price. The way to do this is a unique representation of the
opening price, the highs, the lows and the closing price. The candlestick is
made of wicks and the actual body.
Source: fxwords.com / j / japanese-candlesticks.html
The actual body shows you the conviction of a movement,
while giving you the wicks, the coated feeling that she is unlikely to persist.
If the actual body makes (relationship between opening and closing) the
majority of the candle, there is a trend candle, because the price closed near
the end of the time period from. If the wick (relationship between high and
low) accounts for the majority of the candle, it can seem a so-called warning
light of indecision, which suggests you get out of a trade in the trend
direction or to try to move from the emotional overstrain avert.
Learn Forex: AUD / USD Range is limited by large wicks
highlighting the Entries
(Created Using FXCM's Marketscope 2.0 charts)
A Japanese proverb , which is often quoted by candlestick
chart enthusiasts, says : "The candles consume itself to give the light of
men." the candlestick analysis on the market today given similar
attention. If you want to know which candlestick patterns are currently
available on the daily chart, scans and presents our tool for technical
analysts trades in relation to these formations.
Learn Forex: Daily Candlestick analysis available on
Technical Analyzer
(Charts available on the Trading Central Technical Analyser
from DailyFX Plus. Free trial available )
Bar chart
Although it brings you the same information as the
Candlestick chart technique, the bar chart is a bit lackluster. The bar chart
shows clearly the opening and the closing price, as well as the high and the
low, but he shows no colors. Some traders who view the information about the
High / Low as the most important and do not want a color code shows the
tendency to use the simple pattern on the bar chart to trade.
Learn FX: Comparison of the bar charts (left) &
Candlestick Charts (right)
Source: fxwords.com / j / japanese-candlesticks.html
Traders often look to bar charts to monitor range
comparisons. If a beam range completely inside is a previous bar or completely
outside of the previous bar, then you may face a indecision, the great
movements may precede.
Learn Forex: Inside Bar
(Created Using FXCM's Marketscope 2.0 charts)
Line Charts
However, line charts provide the least amount of data, which
is not generally a bad thing. Many traders believe that the closing price is
the main course of the day, and that's where shines the line chart. The
simplicity of line charts stands out especially in well-defined trends.
Learn Forex: Line charts eliminate the noise and show you
only the data final
To give some recognition to the simple chart, used Jamie
Saettele, our chief technical strategist, often line charts with his Elliot
Wave analysis .
Thoughts on the final
You should now have a pleasant overview of the 3 main chart
types. More importantly, you can also see the benefit of the individual forms
in order to select the right one for you can. Finally, the chart is best for
you, where you can manage the risk of feeling good.
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