# Types of graphic charts

Types of graphic charts used in technical analysis on Forex.

Forex graphic charts are usually made in two coordinates - the price (shown on the vertical y-axis) and the time (shown on the x-axis). Sometimes the tick volume chart is also made along the y-axis.

The time–axis scale (also called interval, trading period or time frame) can be different.
Traditionally, the following intervals are used as a timeframe: 1 month, 1 week, 1 day, 4 hours, 1 hour, 30 minutes, 15 minutes, 5 minutes, 1 minute, and an individual quoting or a tick.
Note: an individual quoting or a tick is a price, changed by the market maker, transferred by the informational systems simultaneously in the form of two new prices: Ask and Bid. Each price period has four measures :

- the opening price of a trading period is a market price, which has been formed by the moment of the trading period start. As there are always two prices at the beginning of the trading interval (buying and selling), the open price is usually calculated as the mid-price of Ask and Bid, i.e. (Ask+Bid)/2. The actual price at the beginning of thetime frame is the first quote of the given period.

- the closing price is a market price, formed at the end of the trading period. As there are always two prices at the trading interval end, the closing price is also calculated, as the arithmetical average of Ask and Bid, i.e. (Ask+Bid)/2; in fact, the close price is the last quoting of the given period.

- the high price of a trading period - is the highest price on Forex, formed within the period (Ask is usually used as it is always higher than Bid).

- the low price of the trading period is the lowest price on Forex market, formed within the period (Bid is usually used).

Optionally to these four measures, the tick volume is shown in the chart as an independent indicator.

- the tick volume is the quantity of ticks (the price change of market makers), which entered the informational system within the given time period.

Types of charts

1. Tick chart

It has the finest scale - 1 tick (the individual quoting of Bid and Ask prices by a market maker). It is the chart of Bid and Ask quotations, which have the form of columns on the price chart.)
The maximum of each separate column is Ask, the minimum is Bid.

Usually, the tick chart use is limited to the precise identification of support and resistance levels, and it is also used to increase the effectiveness of buying and selling, making this at the local minimums and maximums. As a rule, it is not used for the market analysis, as its scale cannot be applied in technical analysis.

2. Line chart

Line chart is plotted using one of the prices within the periods, noticed hereinbefore. In most cases the closing price is used for its plotting, though, opening prices, high prices and low prices can be used also as their synthetical variations: Median Price ([High + Low]/2) or Typical Price ( [High + Low + Close]/3).

The linear chart has some positive and negative features.

Positive characteristics:

- it is comfortable for the search of technical analysis patterns;

- absense of excess information.

Negative features:

- since it is formed using the only price type, it is impossible to evaluate if there have been significant price rises and falls within the trading period.

3. Bar chart or the chart of interval histograms

To make a bar chart, all four measures of prices are used: opening, high, low, closing.
In the chart, each period is shown by a vertical line (which is the range of price variation within the period), to the right and left of which there is a line.

The upper end of the vertical line shows the high price level, reached by the market within this period. The bottom end of the vertical one shows the lowest price level, reached by the market within the period. Thus, the vertical line as a whole is the trading diapason period (e.g. an hour) or the overal limits of the price variation within one period.
The left line shows the level of price at the beginning of the period and is called the open price. The right line shows the level of the price, which was at the end of the period (e.g. a certain hour) and is called the close price. Considering that the right line shows the price at the period opening and the left – the price at the closing period; if the left line is higher than the right one, the price within this period has decreased. If it is vice versa, the price has increased.

- there is a possibility to estimate approximately, what was happening within the period;
- the gaps are seen on the chart.

- difficulty in estimation the growth or the fall of the market within the period at first sign.
- impossibility to define the trend within the period (it’s necessary to skip to smaller scales)

4. [[Japanese candlesticks (I)|Japanese candlesticks]]

Candlestick chart is almost identical in depicting the functionality with bar charts, but is more comfortable for visual perception. All four core types of prices and each single candle are used in this chart. Like in the bar chart they denote a certain period of time, e.g. 1 hour.

The wide part of the candle (the rectangle) is called the real body. The real body is a price range between the opening and the closing prices. The solid real body means, that the closing price was lower than the opening price, i.e. within the period the price decreased. The empty or transparent real body shows that the closing price was higher than at the opening, i.e. the price was growing within the period.
The vertical line above the candlestick body is called the upper shadow, and its upper point shows the maximum, to which the prices were uprising within the period. The vertical line under the candlestick body is called the lower shadow and its lower point is the minimum, to which the prices fell within the period.

Note:

The body of the growing and falling candlestick in different programs of technical analysis can be of different colors, depending on the setups of the trading terminal InstaTrader. Originally, the red candlestick means the growth and the black one denotes the fall. But as the story says, the first candlesticks charts came to the USA from Japan on the photocopies, where the decreasing candlestick was black and the increasing were white. There are other combinations, for example, the green growing and the red falling. As a rule, there is a tradition that the solid candlestick denotes the fall and the blank shows the growth, or the decreasing candlestick is darker than the increasing one.