Price chart

    By
    Andrey Orlov
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    3785

    What is a price chart in trading?

    A price chart is a graphical representation of the price action of an asset for analysis and decision-making support.

    The most common type of chart used in trading is the Japanese candlestick chart. Other types of charts include:

    While they are all based on the same information the market provides, the way information is presented to the trader is different. A chart with candlesticks, for example, will provide you with more information than a simple line chart. Which chart you use depends on your preferences and the strategies you use.

     

    You can see in the image above that the line chart on the left is a very simple way of showing price movement. The Japanese candlestick chart on the right shows more information: each candle shows the open, high, low and close prices (OHLC) for the period.

    Most traders use candlestick charts, as they provide a multitude of information and give a good picture of what is going on. Many indicators in technical analysis are based on the information the candles represent.

    Charts can be displayed in different time frames, comprising the data of a certain period of time. This is especially important for the candlestick and other OHLC charts, as the potentially very volatile action inside of periods of time is partly hidden on a longer time frame.

    Learn more about Japanese candlesticks:

    How to read Japanese candlestick charts

    If you are new to trading and want to start with a simple strategy based on analysing charts, we recommend you our beginner strategy on forex trading:

    Forex trading beginner strategy