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- Chart Types
Metatrader 4 allows you to view 3 different chart types: line, candlestick, and bar. Each chart type has its advantages and disadvantages. Each has its own benefits and preferred usage timeframes in market analysis. In this section we will discuss the chart types and how to interpret them.
A few things apply to all of the charts that we will be discussing here.
- The x (horizontal) axis is always going to be time and the y (vertical) axis
is always going to be price.
- The price displayed in the charts is always going to be the bid price.
The line chart is very easy to interpret; the line represents the bid price, for the Forex pair, at each particular time frame.
Line charts are typically used on tick charts and work best to eliminate the noise on shorter term timeframes.
Line charts can be viewed by clicking the icon to the right on the charts toolbar.
Bar Charts illustrate price movement during each time period depicted in your chart. For example, if you choose the 5 minute periodicity each bar will represent 5 minutes. However, the price action within each 5 minute period can also be of value in your analysis.
Certain bar formations may indicate key reversal areas according to some technical analysis theories.
Each bar tells you key information for each time period. It tells you the high for that period, the low, the opening price and the closing price for the period.
The small, horizontal line on the left is the open price.
The vertical bar is the range for that time period, with the high of the bar representing the high for the time period and the low of the bar representing the low for the time period. The horizontal line to the right is the closing price.
The bar chart type is best used during periods of more than 5 minutes, as there is too much noise when using bars during smaller time periods.
To view your chart depicted in bars, just click the icon to the right on the charts tool bar.