Line charts are a form of chart type that takes into consideration the closing price for a particular period of time. It is the simplest form of plotting price on a chart and works in any markets. Perhaps the biggest advantage of using line charts is that this chart type works in any market, regardless of liquidity. The basic tenets of technical analysis are still applicable to line charts which make it a powerful yet simple chart type to use. The line chart is plotted along an X and Y axis, representing Time and Price and can be plotted in any time frame… from Monthly or yearly and down to the five or one minute chart. Line chart comparison with Candlestick and Bar Chart The chart above shows a comparison of the line chart along with a Bar chart and Candlestick chart. Notice that th
Renko Charts is a type of charting concept that was developed by the Japanese. Renko (or Renga) is the Japanese word for Brick and aptly reflects the nature of the Renko charts. Renko charts are constructed by plotting price movements as bricks of a certain size. Unlike its close cousin, the Bar Chart or Candlestick chart which plots Price’s Open/High/Low/Close against Time on the x-axis and Price on the y-axis, Renko charts purely reflect price movement and is time independent. Although most Renko charts do have time plotted on the x-axis, it is irrelevant. Renko charts are considered to be pure price action minus the noise one gets to see on Bar or Candlestick charts. The Renko’s or bricks are printed next to each other. So when price moves up by a certain number of pips, a bullish Re
Using charts in trading offers traders a visual interface into the marketplace. Traders make use of charts in order to understand the market dynamics that are in play behind the price action. No matter what you trade, stocks, options, forex or commodities, trading without using charts is like driving blind. Charts are relatively easy to grasp, perhaps because they are visual. However it can be misleading as most beginners in trading tend to use charts without having any basic knowledge to help them in their chart analysis. Charts do not predict the future price of the instrument, but when analyzed correctly can tell the trader a great deal on how to trade, when and what. There are many types of charts but the most commonly used chart types are Candlestick Chart Line Chart Bar...
You can find low-risk, high-probability trading opportunities by trading with the trend. The trick is to find the end of market corrections, so you can position yourself for the next move in the direction of the trend. This excerpt from Jeffrey Kennedy's free 47-page eBook How to Spot Trading Opportunities explains where to find bullish and bearish trade setups in your charts and how to zero-in on these opportunities. If this lesson interests you, the full 47-page eBook is free through July 6. On the left-hand side of the illustration below, there are two bullish trade setups. As traders, we want to wait for the wave (2) correction to be complete so we can catch the move up in wave (3) – this is the trade. What we are trying to do in this bullish trade setup is anticipate the potenti