welcome back to the course on Forex trading just can be very fun stroller going to talk about Forex charts very often when you he...
welcome back to the course on Forex trading just can be very fun stroller going to talk about Forex charts very often when you hear about Forex charts so you view the abbreviation OH LC.
So what is it even stand for what is it mean OH LC stands for open, high, low and close and to get to know this abbreviation a bit better.
We're going to start by drawing two axes. The horizontal axes will be time and the vertical axis will be price know these four blue lines represent each one of them represents the start of a new day on our timeline.
So right now on our chart. We have three-day stay. One day two and a three.
Now let's first. I can forget about they wanted three and just focus on day two we going to use this charts to represent how the price of a certain currency pair change through time.
So let's assume for instance that will look at the euro use dollar currency pair when day two started this currency pair had already had a crisis in price.
So at midnight of day two, there was a certain price. Let's mark this price with a simple – at the correct price level.
Also when the day finished at midnight between day two and a three the euros dollar currency pair also had a price list marked out as well so the first – the one on the left is called open price because the day they too opened with that price and the second – the one of the right is called the close price because they too closed with that price and also throughout day to the price naturally moved up and down and somewhere there.
There was a minimum price of that day so this market minimum price. If an X on the other hand, there was also a maximum price throughout the Dallas mark that one is with annexes.
Well, if we now connect X's | and forget about the axes themselves. Then we have now created a complete bar for your use dollar currency pair for that day for day two.
And as we sort through the creation process any bar has four price points.
The open price which is the – in the left, the low price which is the bottom of the | the high price which is the top of the | and the close price which is the – on the right.
So to quickly sum up, every bar has an open, low to high and the close price and that's where the abbreviation OH LC comes from no report.
Multiple of these bars together, then we will get a Forex bar chart.
As you can see the closing price of one day is actually the opening price of the next day.
There are some exceptions to this rule, especially if you're looking at a Friday and Monday because something might have happened over the weekend and opening price on Monday might be different to the closing price on Friday, but generally speaking, in most cases bars flow on from each other know.
Sometimes these bar charts can be colored into red and green rather than just black to help traders see right away which bars are going down, and which bars are going up bars that are going down are called parish bars and bars are going up a cold, bullish bars, but will talk more about bears and bulls in one of the upcoming tutorials know this is a bar chart and Forex.
There are actually two more other types of charts that are very popular with traders.
The next type of chart and perhaps you've even heard about this one, but if you haven't don't matter is called a candle Chuck I'm just going to transition this bar chart into candle chart and watch how this transition happens in front of us.
We have the same chart, but now it looks different.
Instead of vertical bars and horizontal – as we got these rectangles with lines sticking out of them at the top of the bottom and some of that rectangles a whole and some of them are filled.
In essence, this chart carries the same information just visually presented differently.
The first thing that we can notice is that because of these vertical lines.
Some of the rectangles actually do look like candles and that's what is called a candle chart know every one of these candles has three elements to it is going to body and go to shadows.
Sometimes the shadows are also called tales.
The shadows are very easy to understand because other the same as what we had with the bar chart the top of the top shadow represent the maximum price of the high price and the bottom of the bottom shadow represents the minimum price or the low price.
The body is a bit trickier than move from the bar chart the bottom of the body can represent either the open price or the close price and the top of the body can represent the close price or the open price as well.
So how do you understand which one is which will is a general convention that hollow candles of bullish candles, meaning the ones going up and field candles are the ones that are going down or perish candles and here hollow means of the same color as the background field means a different color.
The way to remember this is that hollow is lighter than fields because the field has more paint in them or color their heavier, so the going down on the holy ones are lighter, so the going up that's where I personally remembered.
So knowing whether candles going up or down.
It's very easy to understand whether open prices and close prices.
This is because of the bullish candle.
The bottom edge will always be open price and the top edge will be the close price were as for parish candle.
The top edge will be open price and the bottom edge will be a close price.
Also, candle charts can sometimes be colored just as we sort of bar charts, and that helps traders see patterns quicker.
In this case red means perish, candles, green means bullish candles and finally, this brings us to the lost type of Forex chart which is a line chart a line chart basically simplifies this whole process by representing only one single price.
It only represents the close price.
So instead of looking at the open, high, low and close line chart will only look at the close price.
So if we now take the close prices of every single day and we connect them then will get a line chart.
As you can see it's much simpler, carries less information sometimes can be very convenient to make rough estimations and see overall patterns and then further off to this analysis go into more detail.
Nellis have a look at a couple of real Forex chart here is the euros dollar daily line chart so as you can see this is just what we talked about only the close prices for every single day.
At the bottom you can see the days in the right you can see the prices but most importantly, we can see the line chart which is showing us that currently, the euro use dollar seems to be falling down.
Now let's look at the same chart but represented by a bar chart.
As you can see now we have much more information that might be a bit more cluttered but we can see whether highs and lows were and exactly how this progression with this trend is developing and no, I will change this bar chart into candle chart and you should decide for yourself which one you like more so there's a candle chart the field bars are the Bears bars the hollow bars of the bullish bars and it's actually a matter of personal preference whether you like the bar charts of the candle charts more.
Some people use candle chart. Some people use bar charts all depends on which one is visually more plausible to you.
And finally, I want to show you the same bar chart, but in a different color scheme because we will be working with management for and you'll notice that by default the color scheme is different.
It is green on black so I'm just going to transform this now and as you can see here.
This is the typical meta-trainer for our chart is going to black background and Scott black and white bars.
This might be a bit confusing at first because here the black bars are bullish and the white bars are bearish, as opposed to what we had on the previous slide.
But the way to remember it is not black-and-white but hollow and filled in this case the background of the chart is black so Holo will be black, and therefore the bullish bars are black.
In this instance. And where is white is the opposite of black, and therefore the parish bars are white and there filled with color.
In this case and before finish up this tutorial.
I'd like to mention that Forex charts are available not only at the daily level but at many different time frames.
So you could have one-minute charts. You can have 10-minute charge. You can have 15 minute charts 30 minutes charts weekly charts monthly charts and you can actually have any kind of charting between our because their special tools to create those charts for you, but will go into more detail on this in further tutorials and you'll see how we naturally will work with 15 minute time frames and already time frames all of the concepts they the same.
On that note will wrap up today's tutorial. Thank you very much for your attention and I look forward to seeing you next time. Until then, happy trading
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