Last update 2020.08.05
We have covered explanations about the patterns of candlestick charts, in another article here on the Wiseinvest Academy, but despite the popularity of candlestick charts there are also other chart types available for forex trading.
This article compares candlesticks charts to bar charts and the classic line chart, to find the answer to “what’s the best chart to trade forex?”
As a reminder, if you are using a Candlestick chart of the AUD/NZD symbol while receiving a Wise forex signals alert, you can clearly observe the movement once the price drops below a certain price, such as when it reaches a take profit objective on a short trade.
Fro traders who only want to know the open, high, low and close (OHLC) prices, the bar chart can be a cleaner representation that the candle chart. The bar chart contains the same information of candlestick, but it is not filled with color.
Compared to candlestick charts, there are small differences, the open price comes first, at left of each bar, on the bar chart, and closing price at right side of each bar. The thin line goes from the maximum to minimum price. Finally, the color pattern is the same. If closing price is higher than open, the bar will be one color (i.e. green), otherwise it will be another contrasting color (i.e. red). Let’s see how the same AUD/NZD graph above will look like as a bar chart here below.
The candlestick and bar charts look very similar, and we are capable of interpreting the same information, it simply looks a bit more cleaner in a bar chart, as the open and close prices are denoted by the small horizontal lines to the left and right of each bar. It can make a difference once you start to put some indicators and other analyses over the image, as a bar chart can stay cleaner than a candlestick chart.
Very often, traders want to see the trend of the forex pairs and our mindset almost immediately thinks about lines. Therefore, the other very popular fashion of presenting data in forex is using a plain Line chart. Using the same example of AUD/NZD forex pair, we change to the chart to a line graph in our broker analysis tool.
We can set the green line to maximum prices, the red line to minimum prices and the blue line from opening to closing prices.
One very important information is that the line is not continuous, it was made by a sequence of spot measures connected among each other. It represents a continuous line, but it is not, rather a series of dots that are connected. It is relevant because future values can be very far away from previous values, making our graph jump from one dot to another.
I would prefer the two first kinds, candlesticks and bar charts, exactly to avoid the feeling of connection between each period, compared to a line chart. And because I like to use other line indicators as mobile means.
However, since using Wise automated AI-Trading system or Wise forex signals, which is powered by Artificial Intelligence (AI) I don’t have to focus so much on charting to find trading opportunities. Instead the AI can trade totally automated in the broker account. On the other hand, when using the AI signals system, I focus on the signals generated, and do not need to look graphs anymore. I just do it to for research purposes or fun.
Chart analysis made by humans is more subjective than those made by Artificial Intelligence, which is completely objective and based on math. Wiseinvest has what we believe is the best AI to analyze graphs for you.
If you are using Wiseinvet automated AI trading you do not need to do chart analysis. As an option to trade, with the AI-Signals system you can see the results of your trading signals by copying and pasting it in your favorite broker, as xtb.com.
It is relevant to know that AI-powered trading systems can consider a much wider range of parameters and information than is possible to plot in any kind of graph. That is one reason why it can perform better.
Of course, not all AI-powered trading systems are equal. Wiseinvest is proud to have developed the Wise trading system after many years of research, and being able to deliver above-average results in our trading system’s performance.
- Charts of candlestick, bars and lines are useful to see forex pairs and related chart patterns visually.
- Each chart type has some favorable aspects, my favorites are candlesticks and bar charts.
- Once Artificial Intelligence came forex, it can supersede human analysis over any chart typ. That is why you need providers like Wiseinvest to increase your chances of obtaining profitable results.
Wise AI forex system can provide a stronger strategy than a pure human-powered charting analysis, no matter which kind of graph you choose, thanks to our AI-powered approach.
Did you enjoy reading, “Candle vs Bar vs Line. What’s the Best Chart?” If you liked our content, please subscribe and read more on our Academy of forex trading.
Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.
The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. The forex broker Fxcm warns that 69.66% of retail forex traders lose money trading CFDs.
The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.