Currency charts are important tools for forex technical analysis. By correctly interpreting forex charts, you can easily figure out the direction of the prevailing trend in the forex market. You will also be able to determine whether your trading operations are going in the same direction as the main market trend or not.
The candlestick, one of the most popular currency charts, was discovered by a Japanese trader in the Homma futures market. He found that rice rice was strongly influenced by the emotions of traders. In addition to supply and demand factors emotions played a crucial role in dictating the price of rice.
The fx candle graph is similar to a histogram. In the candlestick chart, the daily line shows the level of market opening, the highest, minimum and closing level for the day.
A unique feature of this chart is the broad part of the forex chart, which is also known as the “real body”. This real body shows the range between the opening and closing levels of a particular day’s trades. If the real body is filled or painted black, it means that the closing levels were lower than the opening levels. This means the opposite if the real body is not filled and empty.
Comparison of candlestick and histograms
o The relationship between opening and closing prices
The bar charts focus on tracking the closing price movement of the current day compared to the closing level of the previous trading day. Analysts using FX currency charts focus on determining the relationship between the closing price and opening of the same trading day.
o Body color change
Both of these currency charts basically show a general trend in the value of the currency. However, looking at the changing body color of a candlestick chart, it is much easier to interpret everyday market sentiment. Thus, despite the fact that both the histogram and the candle diagram show the same information, the latter information is very easy to visually interpret and understand.