The Six Different Types of Charts

What are the Different Chart Types?

There are several different types of charts used in technical analysis and these charts are explained below.

One can use this chart types tutorial to find out which chart types are best for them to use when analysis the market price movement:

Line Charts

Line charts are basic charts that only draw a continuous line connecting closing price from one chart timeframe period to the next.

XAUUSD line chart provides price data as a continuous line that connects a series of closing prices.

The line chart will not draw other price information such as the high of the price, the low of the price and the closing of the price.

XAUUSD traders can also use line charts to identify and trade technical analysis patterns such as double top & double bottom.

XAUUSD traders can also use line to identify trends & to draw trendlines on these line charts.

Bar Charts

XAUUSD bar charts will show the price action data of a particular timeframe period.

The bar chart will show high price, low price, open price and close price.

The bar chart will be represented by a vertical line that represents the bar & then there will be a small dash to the left of this vertical bar showing the opening price and another small dash to the right of this vertical bar showing the closing price.

A bar will continue & begin drawing from where the previous price bar left.

XAUUSD traders can also use bar charts to identify and trade technical analysis patterns.

XAUUSD traders can also use bar charts to identify trends & to draw trendlines on these bar charts.

XAUUSD Candles Charts

XAUUSD candlesticks charts are used to represent all the data of the price action movement which includes: high price, low price, open price and close price.

A candle has two parts the body of the candlesticks & the shadows of the candlestick.

The body of candle shows the price action between opening price and closing price. The body of the candlesticks will have different colors depending on the direction of the price movement, blue or green candlesticks when the price moves up and red candlesticks when the price moves down.

The length of the body of the candlesticks will determine how much price movement there was between the opening price & closing price for a particular timeframe period.

The lower & upper thin lines protruding out of the candlestick body are known as shadows & the bottom and top of these shadows represent the low & high price of a particular price period.

A lot of information can be analyzed by trades from the body and the shadows of a candlestick.

XAUUSD candlesticks patterns is a technical analysis study that explains how to read candlesticks and how to interpret signals from these candle-sticks patterns.

These candlesticks patterns include:

• Doji Candle
• Marubozu Candle
• Hammer Candle
• Inverted hammer Candle
• Shooting Star Candle
• Piercing Line Candle
• Dark Cloud Cover Candle
• Morning Star Candle
• Evening Star Candle
• Bullish Engulfing Candles
• Bearish Engulfing Candles

Heikin Ashi Charts

Heikin-Ashi is Japanese & means average bar.

Heikin Ashi charts are used because it is easier to identify trends using Heikin Ashi Charts

Heikin-Ashi charts look like candlesticks but are calculated using a different technique.

These Heikin Ashi candlestick price points are calculated as follows:

Opening Price - Opening price is calculated as the average of the opening and closing price of the prior candlestick

High Price - the high price of Heikin Ashi candle is selected from one of the following data points of the previous candle - high, opening price and closing price - depending on which has the highest value

Low Price - the low price of Heikin Ashi candle is selected from one of the following data points of the previous candle - low, opening price & closing price - depending on which has the lowest value

Closing Price - Close price is calculated as the average mean of opening price, high price, low price & closing price of the prior candle

Heikin Ashi charts generate signals which are slower as when compared to candlesticks charts & this is because of the method of calculation used to plot the Heikin Ashi charts.

The slower signals generated by Heiken Ashi charts can be used to trade more volatile prices because this Heiken Ashi chart delays in reacting to prices will help prevent traders from trading whipsaw signals.

Heikin Ashi charts have less xauusd whip saw signals because of the delays in calculation of the prices.

Renko Trading Charts

Renko charts adds a square block on the chart when price moves by a certain specified distance.

Renko charts are also used to filter out the time when the market is consolidating

When price moves by this distance the Renko charts adds another square block.

The square block will be added in the direction of the price move.

Renko charts are used to identify the trends and trade these trends.

Point & Figure Trading Charts

The point & figure charts are used to filter out the time when the market is consolidating

Point and Figure charts are drawn with X and 0 columns which are vertical.

Point & figure charts are used to compress time using the point & figure chart representations because point & figure adds a new X or 0 vertically rather than next to the previous point and figure and only when the point & figure calculates the trend to have changed then a new vertical bar is then added to the right side of the point & figure charts.

Point & Figure charts are used to identify the trends and trade these trends.

The Six Different Types of Charts Used in XAUUSD Trading