Types of Forex Charts

There are three main types of Forex charts that traders use:

1. Line chart
2. Bar chart
3. Candlestick chart

In Forex trading, most traders use candlestick charts. However, I will go through each type of chart as you may have a different preference.

Line Chart

A line chart is made up of a series of dots connected by a line.

Line charts are very basic, and they don’t provide a trader with much information. This is largely why most traders don’t use line charts.

There are some advanced applications for line charts in price action. You will learn about these later on though!

Bar Charts

In Forex, a bar chart is made up of a series of bars.

These bars give us some useful information. They show the opening and closing prices as well as the high and low for the lifetime of the bar. The top of the bar represents the highest point that the price reached, whereas the bottom shows the lowest price. The dash on the left shows the price that the bar opened at, and the dash on the right shows the price that the bar closed at. Bar charts are sometimes known as OHCL charts (Open, High, Close, Low)

As you can see, bar charts give us much more information than line charts.

Many traders find that bar charts aren’t easy on the eyes. This is especially true when you zoom out and see a lot of bars at once. It can be hard to analyze a currency pair if the chart is difficult to assess. This is where candlestick charts come in!

Candlestick Charts

Candlestick charting comes from ancient Japan. They were used by Japanese rice trades to keep track of changes in the price of rice!

Candlestick charts are very similar to bar charts. Most traders prefer the look of candlestick charts, though.

Candlesticks have bodies, unlike bars. The top and bottom of the candlestick’s body are where the price opened and closed. The "wicks" on either end are the highs and lows that the price reached during the candlestick’s lifetime. The different colored bodies represent whether the candle has moved up or down.