Reading the charts is the fundamental and essential that every apprentice trader must master before anything else basis. Traders spend their days in front of the graphics, a conduct analysis and track their positions.
But before analyzing and trader, better know READ graph. We will present this lesson in the main chart types that exist
Indeed, there are several methods, more or less convenient to represent the class.
As you can see above, the line graphs are the most simple graphics that exist.Changing course is in fact represented by a single line. Each closing of each period is a point of this curve. For example, there is the course every 5 minutes for a chart in 5 minutes, or every hour for hourly chart.
As you can see above, the graphics bar charts are composed of bars. Instead of giving us just the closing of each period, these graphs allow us to take note of during the early period of the course at the end of the period, the highest price reached during the period and during the Lowest reached during the period.
We thus have an idea of the volatility in which we evolved over a period. If we want to compare the graphics lines with graphics bar charts, we can consider that the graphics lines consist of a series of "pictures" while graphics bar charts are to be considered as a "video" of the changing course.
With the candlestick method, the graph is composed of a succession of "candles", each "candle" (see above) representing a period.
When during the early period is lower than the end of the period, this means that prices have risen and the candle is green . In this case, the bottom of the candle represents the course start time, while the top represents the price at the end of the period. The "wick" above represents the highest price reached during the period , conversely for the low bit.
The advantage of this type of chart is to provide a maximum of information, while being more "readable" than bar charts.
This is undoubtedly the preferred method, if only because 99.9% of traders do not use THAT kind of graphics.
The other benefit of Japanese candlestick charts is the ability to analyze charts directly without tools or technical indicators Chartism. There are in fact a succession of well-known candles or candles known types of independent property, which have their own interpretation.
Some special candles devoid of "body."
This type of candle appears when during the beginning of the period is equal to the end of the period, and the course has not changed during the period. Interpretation: Dead quiet
This particular candle (called a "doji") means that prices have trended upward and downward during the period, but finished the period at the same price they started.
Interpretation: Eclipse, possibility of reversal.
This means that the candle at end of period is the same as during the early period, but the courts have "tried to drop" during the period.
Interpretation: Possible bullish reversal
Conversely, here the courts have "tried to climb", but end at the same level at the end of the period.
Interpretation: Possible bearish reversal
But before analyzing and trader, better know READ graph. We will present this lesson in the main chart types that exist
Indeed, there are several methods, more or less convenient to represent the class.
The line graphs
As you can see above, the line graphs are the most simple graphics that exist.Changing course is in fact represented by a single line. Each closing of each period is a point of this curve. For example, there is the course every 5 minutes for a chart in 5 minutes, or every hour for hourly chart.
The graphics and bar charts
The graphics and bar charts are starting to be more interesting because they provide us with more information.As you can see above, the graphics bar charts are composed of bars. Instead of giving us just the closing of each period, these graphs allow us to take note of during the early period of the course at the end of the period, the highest price reached during the period and during the Lowest reached during the period.
We thus have an idea of the volatility in which we evolved over a period. If we want to compare the graphics lines with graphics bar charts, we can consider that the graphics lines consist of a series of "pictures" while graphics bar charts are to be considered as a "video" of the changing course.
The Japanese candlestick charts
The most widely used method, and the best in our opinion, is the method of Japanese candlesticks, which differs little from the method of bar charts.With the candlestick method, the graph is composed of a succession of "candles", each "candle" (see above) representing a period.
When during the early period is lower than the end of the period, this means that prices have risen and the candle is green . In this case, the bottom of the candle represents the course start time, while the top represents the price at the end of the period. The "wick" above represents the highest price reached during the period , conversely for the low bit.
The advantage of this type of chart is to provide a maximum of information, while being more "readable" than bar charts.
This is undoubtedly the preferred method, if only because 99.9% of traders do not use THAT kind of graphics.
The other benefit of Japanese candlestick charts is the ability to analyze charts directly without tools or technical indicators Chartism. There are in fact a succession of well-known candles or candles known types of independent property, which have their own interpretation.
Some special candles devoid of "body."
This type of candle appears when during the beginning of the period is equal to the end of the period, and the course has not changed during the period. Interpretation: Dead quietThis particular candle (called a "doji") means that prices have trended upward and downward during the period, but finished the period at the same price they started.Interpretation: Eclipse, possibility of reversal.
This means that the candle at end of period is the same as during the early period, but the courts have "tried to drop" during the period.Interpretation: Possible bullish reversal
Conversely, here the courts have "tried to climb", but end at the same level at the end of the period.Interpretation: Possible bearish reversal
Read graphs