Chapter 4 Different Chart Types in MT4
Bar charts
The bar chart is a type of chart that was mostly used by technical analysts before candlestick charts passed them in popularity. The “bar” depicts the price action using a single vertical bar to show the range of price action (price range between the high and low prices). It also has two short horizontal bars to the left and the right of the vertical bar, which represent the opening and closing prices.
The “bar” refers to the range of price for a specific time period (which could be M1, H1, H4, or any available time frame) as shown in the picture below. The highest tip of the bar is the highest price for the period while the lowest tip of the bar is the lowest price for the period in review.
Candlestick charts
Japanese candlestick charts, commonly known as candlestick charts, are a type of charts which were first used over two hundred of years ago in trading rice contracts in Japan. The candlesticks were believed to have been first developed by a Japanese rice trader known as Munehisa Homma in the mid 18th century.
The candlestick charts are named after their look; the price representation is done using icons that look like candlesticks. The picture below shows how a candlestick chart looks like using default MT4 settings.
Candlesticks are made up of two components.
The body, which is shown by default on the MT4 platform to be either transparent or opaque (filled) against a black chart background. Color adjustments also commonly display them as black or white (on white colored charts) or as red and green on either black or white background charts.
The shadow, which resembles the wick of a candle. There can be an upper or lower shadow, which is located either at the top or bottom of the body respectively.
Line Charts
This type of chart represents only a closing price over a period of time, the closing price is often considered the most important element in analyzing data. This is in essence, how the line chart is formed: by connecting the closing prices over a set time frame.
There is no visual information or trading range, meaning no highs and lows and nothing on opening prices. Line charts are mostly used to determine support and resistance zones and to determine the trend quickly.
