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December 09, 2019
Most forex traders only know three types of charts, namely Line Chart, Bar Chart, and Candlestick Chart. The best forex broker finds that among the three, Candlestick is the most popular chart type and is the most widely used by forex traders throughout the world.
The reason is that Candlestick charts contain complete information about price movements and can be directly used for forex technical analysis without even additional indicators. Actually, there are also some other types of charts that are full of information and can be used for technical analysis of forex without indicators.
Unfortunately, it is very rare for traders to recognize these types of charts. Most forex trading platforms do not include it built-in, so traders need to install a custom indicator in order to take advantage of it. Did you know what kind of chart is that? Some types of sophisticated charts but less well known are the Tick Chart, Point and Figure Chart, and Heikin Ashi.
Tick Chart displays can resemble Bar Charts or Lines Charts but contain important differences. Conventional charts (Lines Charts, Bar Charts, and Candlesticks) draw a new bar after a certain time, such as per 5 minutes, 1 hour, 1 day, and so on. Meanwhile, the Tick Chart will draw a new bar after a certain number of trades have taken place.
For example, 200-Tick Chart, meaning one bar will be created after 200 trades occur. Throughout the day, the frequency of forex transactions must be fluctuating. Therefore, Tick Chart movements are not always uniform. From the European session to the opening of the American session, the Tick Chart can be so busy that it creates five ticks in one minute.
However, in lonely times like the Asian session, the increase in ticks can decrease dramatically to five ticks in one hour or the like.
Heikin Ashi is the development of candlesticks by experts. The shape is similar to ordinary candlestick charts, but the calculation formula for each bar is different from candlesticks. Ordinary candlesticks are created from the opening price (Open), the highest (High), the lowest (Low), and the closing (Close) within a certain time period.
However, Heikin Ashi is made from an average of Open and Close prices, as well as maximum prices (the highest among High, Low and Close), and minimum prices (the lowest between High, Low and Close).
As a result, Heikin Ashi displays graphics that are smoother and clearer than ordinary candlesticks. However, current price conditions may not necessarily be visible on the Heikin Ashi chart. Therefore, the use of Heikin Ashi in forex trading also requires special training.
This rare type of chart is thought to have existed since the late 1880s or early 1890s. The appearance is very unique because it ignores the element of time. Vertical lines on the chart indicate prices, while horizontal lines indicate conditions of the uptrend (symbol X) and downtrend (symbol O).
Point and Figure Chart users often use it for intraday trading, because it is considered easier to monitor trend lines and breakout points. However, novice traders may find it difficult to use it before actually mastering how to trade with bar charts and the concept of trading breakouts.
Well, among these three rare chart types, is there anything that catches your attention? If yes, try checking the Salma Market's forex broker to see more about it. Look for custom indicators that are widely circulated in the trader forum. Practice how to use it optimally on a demo account until you are proficient, and then just apply it in live trading with the best forex broker!
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