Forex charts are one of the most important tools which every smart Forex trader must use. Due to fast paced environment of trade today, most of the Forex traders at XFR Financial Ltd are interested in taking positions based on small time frames. They do not hold positions for long and some may initiate a large number of positions in a single day. Some are even more fast and trading on the basis of even smaller timeframes. When dealing with such small timeframes a constant analysis of charts is important and using technical analysis on them, a smart trader can get the most of the benefit from trading as supposed.
Forex charts and the associated patterns provide a wealth of information to the XFR Financial Ltd users in a small amount of time. Though there are many types of FX charts we will discuss about one of the most popular types of chart which is candlestick Forex chart.
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Candlestick charts at XFR Financial Ltd
Many people already have seen the conventional line Forex charts in everyday’s life but when trading with XFR Financial Ltd, candlestick charts have been used from 300 years and displays a lot of information than the conventional line chart. The candlestick is thin vertical line and a bar in this type of graph. The wide bar on the vertical line shows the difference between the open and close position in a time frame. The upper and bottom tips of the line shows the highest and the lowest price of the day.
Thus the candlestick shows the open, high, low and close positions at a specific day or time frame. The wide bar is called the real body. The body is black or red if the close was lower and the body is white or green if the close was higher.
Thus the candlestick chart displays a wealth of information on it and therefore it is very easy to understand the trend easily through the candlestick charts. At just a single glance you can understand what is going on and where a currency opens and closes. You can also know what is high and low and whether it closed higher or lower than what it was when opened. Thus the trend in the prices in your XFR Financial Ltd account is better observed through the candlestick charts.
History of candlestick charts
They were developed in the 18th century and the Japanese traders used it widely as the financial instruments in the trading. Steve Nison in his book “Japanese Candlestick charting techniques” introduced them to the Western world. These charts were used in Japan for many years and became popular in Western countries only when they started taking interest in them and adapted in the trading community. The book of Steve Nison on candlestick charts has developed a lot of interests in the western traders and it contains a lot of research works done by Steve on Candlestick charts which is very impressive.