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Chart analysis

Chart analysis

The graphical analysis involves a price chart and a sequence of prices plotted over a specific period. In statistical terms, the graphs are considered as time series plots. On the chart, the y-axis (vertical axis) represents the price scale and the x-axis (horizontal axis) represents the time scale. Prices are plotted from left to right on the x-axis with the most recent being the rightmost bar.

Technicians, technical analysts and chartists use charts to analyze a wide range of movements of securities and forecast future prices. The word "securities" means any financial or exchangeable and quantifiable instrument such as stocks, bonds, commodities, currencies, futures or indices. Any instrument with price data over a period of time can be used to form an analysis table.

Types of Charts

There are four main types of graphic répendus in the world and the most widely used.

Line Graph:

The graph line shape is a simple graph. It is formed by plotting the price, usually the closing price of the security on a predefined period of time.

Some investors and traders consider the closing level higher than the levels of Bid or Ask. By paying attention to the closing price, intraday swings can be ignored.

Bar Graph:

There are three very useful information for a graphic Analyst

  • The opening price of the unit of time (5min, 15min, a day or more etc.)
  • The closing price on the same unit of time
  • The highest and the lowest in the time unit

Thanks to a bar chart we have all this information, the opening price is seen thanks to the small horizontal line on the left and closed on the right, the extremities of the bar they represent the highest and lowest unit time (5min, 15min, a day or more etc.)

Table Candle Japonnais (or candles or Candle Stick)

From Japan 300 years ago, candlestick charts have become very popular in recent years. Dozens of books that speak of these stanchions and the way they can be analyzed. Giving the same information as a bar chart, the Candle Japonnais is easier to read, it will be red when the close is lower than the opening and green when it is the opposite (on MT4, you can also choose other colors)