Do you think a line chart provides enough information to use in your trading strategies? The bottom line, it depends on the way you are going to trade the foreign exchange market. If you are planning to rely on general market commentary and financial news, then a line chart might do the work for you. Otherwise, if you are looking for a more in-depth trading chart where you can integrate technical indicators such as MA, RSI, and Bollinger Bands — then, a candlestick chart is the ideal choice.

Get your free access today to join our academy to career funded trader program. Great, you've been entered into our monthly prize draw. We'll notify you if you've won. A password reset has been requested for. Check your email for your reset link. Types of Forex Charts and How to Read Them.

Types of Forex Charts. Getting Started With MetaTrader4. Previous Lesson. Next Lesson. Line Charts in Forex [Explained] Types of Forex Charts and How to Read Them Line Charts in Forex [Explained]. A simple line chart. What is a Line Chart? You have no clue what else happened. Was it this? Get your free access today to join our academy to career funded trader program Join Free Now.

Back to Course. Google Facebook Apple. Please enter your full name. Please enter your email. Please enter a username 3 to 20 characters. We're committed to your privacy. We use the information you provide to contact you about your membership with us and to provide you with relevant content. You can change your preferences at any time. Whenever I got a signal in one direction, other things I learned and watched gave me a signal into the other direction. It was time to weed out. And I am not even talking about indicators here.

No, I am talking about the thing that everyone so religiously loves — candlesticks. It seems there has been a cult around these ever since Steve Nison, or whoever claims to have brought them to the West first, introduced them to us. Price action is king, yes of course it is. But to me, seeing the open, high, low, and close was just too much information to digest sometimes. So I started to play around a bit with different chart tips, tick bars, volume bars, renko bars, and so on. A standard line chart shows us the close of each bar — basically, it is a simple moving average with a period 1 applied to the close.

All candlesticks fanatics always preach to wait for the close of the bar, so why not only look at the close of the bar? Since then, I always have a line chart open whenever I trade candlestick charts, and I have even developed a strategy based solely on line charts, which is performing nicely for me.

Looking at this chart, I have trouble finding something tradeable. Sure, there are some things, but nothing that stands out, although price has been moving pips and more in that period we see here. What can we see on the line chart, however? Firstly, the head and shoulders formations are much easier to spot. These are just a few of the ones I spot at the glimpse of an eye on this chart.

Now when we switch back to candlestick charts, you will see that you see that every pattern I drew here actually cut through the wicks of the candles. See what I mean? Maybe, at least I hope so. with the power of the simplicity of line charts and their much easier pattern and trend recognition, is what really pushed my trading to the next level. Take a higher timeframe line chart and when it points down, and your lower timeframe line chart points down as well, try to get in on a or 2B pattern, and you have a obviously discretionary winning strategy.

But that is a topic for another post. Will switching to line charts make you a winning trader? No, of course not. But they will bring clarity and simplicity to a chart if you, just lile me, cannot handle the information overload of opens, closes, highs and lows, wicks and bodies, strong closes and weak closes, and so on. Candlesticks, like any other visualisation of price, are an indicator — too many indicators simply will clog your thought process. I look for multi-bar patterns on the line chart, and get confirmation from single candlestick patterns on the candlestick chart — this makes trading so, so much easier.

I dare you to give it a try because most likely you are way overestimating your information processing power and are just as slow as me.

Trading is about pattern recognition, after all, and patterns are the easiest to see on line charts. What do you think, are line charts as visually appealing to you as they are to me, or are we missing out on vital information by trading them?

Let us know in the comments below! Yes have been using line charts to mark my channels, trendlines etc for while now but not really for trading. Will defintely look into how i combine the two more, great article 🙂.

Nice information, particularly looking at higher time frame for direction and trading or 2B on lower time frame. What is and 2b. Thanks Sir, your article has open my eyes. Now could made higher winning with simple price action line chart….

In Forex trading, a chart is used to paint a picture of how the price of a currency pair has moved over a period time.

Therefore, the X-axis equals time and the Y-axis equals price. What is a line chart? A line chart is the simplest type of chart available on trading platforms. A line chart, as you have probably guessed, consists of one line going across the chart. Therefore at any one given time, there is one value for price. A line chart will always show you the closing price for whatever period you choose to view. For example, if you are viewing a line chart in days , then the prices shown are the closing price for each day.

Therefore, a line-chart blocks out potential noise made from the open price, high price and low price of the currency pair. Traders can be overwhelmed with too much information when analysing more complex types of charts. Using charts that show lots of price information and indicators can give multiple signals that lead to confusion and therefore complicate trading decisions. Using the line chart helps traders clearly identify key support and resistance levels, trends and other recognisable chart patterns which we will be covering further on in this lesson.

Line-charts are good for spotting long term trends, as you are able to get a feel for how the market is moving, with any major turning points clearly shown. Line charts are ideal for new traders to use due to their simplicity. They are ideal to teach beginners basic chart reading skills before learning more advanced techniques. Volume and moving averages can easily be applied to aid a line-chart in decision making.

Closing prices are typically considered the most important component of price, it is understandable to see why line-charts are commonly used in traders set-ups. Traders tend to use line charts in conjunction with other charts to confirm whether a price is trending or not.

Line charts may not provide enough price information for some traders to monitor their trading strategies. Some strategies require prices derived from the open price , high price and low price. F or many decades plenty of traders have wanted more price information than just the close. Contact Us Try: Demo Trading. Free Forex Course.

LINE CHART. Benefits of the Line Chart Clarity Traders can be overwhelmed with too much information when analysing more complex types of charts. Easy-to-Use Line charts are ideal for new traders to use due to their simplicity. LESSON SUMMARY: In Forex trading, a chart is used to paint a picture of how the price of a currency pair has moved over a period time.

On a chart, the X-axis equals time and the Y-axis equals price. A line chart is the simplest chart available on trading platforms. At any one given time, there is one value for price.

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Using the line chart helps traders clearly identify key support and resistance levels, trends and other recognisable chart patterns which we will be covering further on in this lesson. In other words, the daily close is more important as a signifier of market sentiment than the hourly close. Because of that, the rule of a thumb implicates to trade only the first two times when the price tests the averages. com and all individuals affiliated with this website assume no responsibilities for your trading and investment results. This is why experienced traders use line charts instead of using candlestick charts and consider a relevant test only when the moving average is touched by the line chart. Line charts offer a good visualization of the patterns. A line chart is the simplest type of chart that draws a line from one closing price to the next closing price.

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