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The different types of charts on the Metatrader

Today we see what are the different types of charts that THE METATRADER makes available to us to better reconstruct the price movements in relation to time (TIME FRAME) of the main financial instruments that we are going to analyze during our operations. Let’s say that mainly there are three types of graphs, or rather, the most used and known, also because there are other more complex and less used ones that maybe we will explain one day in our blog … now let’s focus on the three most classic ones, namely: LINE, BAR, and JAPANESE CANDLES.

The LINE or Linear chart is undoubtedly the simplest and most intuitive, but also the least used compared to the other two because it certainly offers less information to those who try to read and interpret it. In fact, this graph does not show the highs and lows of the interval taken into consideration but only the closing or opening price. Obviously, an advantage of this situation can be identified in the “clean” representation of the graph, that is, without too many frills and tears due to volatility, however, on the other hand, there is a series of disadvantages, such as the failure to identify any GAPs recorded in the initial phases of bargaining.

Furthermore, the lack of identification of the minimum and maximum levels makes the real evaluation of the volatility expressed by the market impossible or almost impossible and also a very difficult identification of a series of GRAPHIC PATTERN. In conclusion, the linear chart is mainly used to have a quick and simple trend analysis of our financial instrument. Certainly of greater complexity of interpretation but much more used and reliable is the bar graph (bar charting). This graph is made up of a series of vertical “bars” and each is correlated with a well-defined and known time interval.
Each bar, looking from left to right, incorporates the following indications: the first dash indicates the opening price (OPEN), the whole body of the bar indicates the excursion between the minimum and maximum in the time interval taken in consideration (TIME FRAME) and finally the right notch indicates the closing price level (CLOSE).

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So every single bar provides us with many indications, including the very important one relating to its trend, or rather, to the price trend. All this is determined by the difference between the opening and closing price. For example, if the close is higher than the opening, we will have an indication of the positive or bullish price and usually for convenience the bar will take a green color. Conversely, if the closing occurs below the opening notch then the indication that the bar gives us will be a falling price and therefore bearish and the same bar may now have a red color. (obviously the color of the bars is only used for visual convenience and therefore to give an immediate indication of the maximum, but they can be of the same color or of different colors).

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Finally let’s see what a candlestick chart is.

So every single bar provides us with many indications, including the very important one relating to its trend, or rather, to the price trend. All this is determined by the difference between the opening and closing price. For example, if the close is higher than the opening, we will have an indication of the positive or bullish price and usually for convenience the bar will take a green color.
Conversely, if the closing occurs below the opening notch then the indication that the bar gives us will be a falling price and therefore bearish and the same bar may now have a red color. (obviously the color of the bars is only used for visual convenience and therefore to give an immediate indication of the maximum, but they can be of the same color or of different colors).
Finally let’s see what a candlestick chart is.

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The body of the candlestick represents the price range between the opening and closing of the period and is called REAL BODY. The candle always has, or almost always, two lines or shadows, one above and one below its body. These are nothing more than the minimum and maximum value of the price reached in that period. Also in this case the candles take on different colors, originally a white candle represents a session in which the price has moved up, vice versa in the case of black color the session will have seen a falling price, generally also here for convenience and immediate glance the colors are red for bearish candles and green for bullish ones.
From this description it is therefore easy to understand that candles with a very small body and long shadows are witnesses of very turbulent moments and of great market indecision, vice versa long bodies with barely hinted shadows indicate price and market direction with clear ideas from the operators. .
The thing that makes the use of candles in the formation of graphs unique is that candles can take different shapes and depending on their sequence they can give life to real PRICE PATTERN capable, with due considerations and contextualizations, to give excellent indications Obviously all this requires a lot of study and a lot of practice but, as I always argue, in TRADING nothing is left to chance!
Well, we have briefly seen what are the three main types of charts that can be used on the Metatrader for our analysis, in the next articles of our blog we will see some interesting PATTERNs and the precious indications that can be obtained from them, therefore we invite you to stay always connected and updated with the BPFX blog!

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