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Lesson 6 - Types of Graphics

In this chapter we will see the most common types of graphics used in the financial market to keep the price of a currency. These are the line graphs, bar and candles.

Line Chart

A single line connecting the closing prices of the day. Because an information only closure is a very useful chart to "draw" trends, figures (triangles, channels, etc.).

The following is an example of line chart

Chart bar

A bar chart shows the closing prices, and simultaneously shows home prices, as the highs and lows of the day. The underside of the bar indicates the minimum price traded, while the cap indicates the maximum price. As a result, the vertical bar indicates the range of prices when it moved the day. The small vertical bar to left indicates the opening price, while the horizontal bar to the right indicates the closing price.

The following chart shows an example of bar graph:
Bar graphs charts are also called "OHLC" (Open, high, low & close), which means graphic open, high, low and close.

Candlestick charts

candle charts show the same amount of information than bar graphs, their difference is an aesthetic and are also easier to read because use different colors as the day is positive or negative.

The reason is called candlestick chart are for the "locks" that appear above and below the body of the "candle"

• Part above the candle is the maximum period of time.
• The bottom is the minimum period of time.
• body determines the beginning and the end (given by the green and red or black and white, depending on the form).

The following figure is an explanatory table of a "candle"

We prefer to use the candlestick chart because they are easier to analyze visually and is a graph of choice for traders or brokers, detailing the following qualities in these graphs:

• candle charts are easy to interpret, and are excellent for beginners to start to study the forex markets. Takes very little time to get used to its shape and it is possible to analyze information based on a glance.
• The candlestick charts are very good at spotting changes in trends, such as growing their own. Changes or trends are easily accentuate and highlight plotted immediately visible in the candlestick charts.