Knowing and understanding the currency rates chart is must-have knowledge for every trader. The charts show the trader information about currency rates from time to time.
And the trader can use to see the pattern or the movement of a certain currency. Thus it helps them take the appropriate action.
Currency Rates Chart – Details
There are three main types of currency rates chart that is very common to use by traders and they are:
1. Line Chart
This is the simplest currency rate chart that a trader can use. This chart draws a line that connected one dot (the closing price) to another dot (the next closing price).
The charts consist of the closing price for one week or more than that. When the chart is completed, the trader will be able to see the price movement of a certain currency.
This simple chart is very useful to get the bigger picture of a currency over a period of time. Usually it will show a pattern that the trader can use to predict the next possible closing price.
2. Bar Charts
A bar chart is one of the currency rates charts that has a nickname. The nickname is OHCL charts or Open High Close Low chart.
This chart is more complex than line charts because it shows more information including opening and closing prices. And also the highest and the lowest price of a currency that was reached on that day.
That is the reason why this chart also called as OHCL chart.
This chart consists of a bar every single day. The top part of the bar shows the highest price of the currency on that day while the lower part of the bar shows the lowest price.
The dash or the little horizontal line on the left shows the opening price of that currency while the closing price shows by the dash on the right.
3. Candlestick Charts
This currency rates chart shows the trader the same information just like a bar chart. But it comes in a better format, which is easy in the eyes.
This chart also shows the high, low, opening and closing price of a currency every single day for a period of time.
The main difference between this chart and the bar chart is in the middle part of the bar. In this chart, there is a large block or the real body of the bar.
This block shows the range between the opening and closing price. If the block in the middle of the bar is filled or colored, then it means that the closing price is lower than the opening price.
But when the block doesn’t fill up with anything, then it means that the closing price is higher than opening price.
Among the three types of charts, the candlestick chart is the most popular chart. That is used by many traders, for many different reasons.
Candlestick chart is easy to use and easy to understand and at the same time provide the trader with more information that they are going to need to make the best decision when they trade.
No matter what types of currency rates chart that trader use, those charts provide the information that every trader must know in order to make the right decision in the trading world.
While all these currency rates charts make Forex trading very attractive, it still requires a lot of knowledge to get a better result.
You have to know the other knowledge such as currency exchange rates, Forex trading platform, currency converter, etc.