Types Of Chart

A green candle, also known as a bullish candle or an up candle, represents a period in which the closing price of a stock or security is higher than the opening price. It suggests that buyers have dominated the market during that time period, resulting in an upward movement in price. 

A red candle, also known as a bearish candle or a down candle, represents a period in which the closing price of a stock or security is lower than the opening price. It indicates that sellers have dominated the market during that time period, resulting in a downward movement in price. 

A line chart is a basic and commonly used graphical representation of the price movement of a financial asset over a specific period of time. It provides a simple way to visualize the overall trend and direction of an asset's price.

A line chart is constructed by connecting the closing prices of the asset for each time period using a straight line. The vertical axis represents the price scale, while the horizontal axis represents the time scale. Each data point on the chart represents the closing price of the asset at a specific point in time.

Line charts are useful for providing a quick visual overview of how the price of an asset has changed over time. They help in identifying trends, such as upward or downward movements, and provide a sense of the overall price trajectory.

However, line charts have limitations in terms of the information they convey compared to other types of charts, such as candlestick charts or bar charts. Line charts do not provide information about the high, low, or opening prices within a given time period. They also do not capture intraday price fluctuations or volatility.

While line charts can be helpful for a general understanding of price trends, traders and analysts often use more sophisticated charting techniques and tools, such as candlestick charts, moving averages, and technical indicators, to gain deeper insights and make informed trading decisions.

A candlestick chart is a popular and widely used charting tool in the share market and other financial markets. It provides a visual representation of price movements for a given financial asset over a specific period of time, such as a day, week, or month.

The construction of a candlestick chart involves plotting individual "candles" on a price chart. Each candlestick represents the opening, closing, high, and low prices of the asset for a particular time period.

The basic components of a candlestick are as follows:

1. Body: The rectangular-shaped area between the opening and closing prices. It is typically colored, with different colors used to represent positive (bullish) or negative (bearish) price movements. For example, a green or white body is used to represent a bullish candle, indicating that the closing price is higher than the opening price. Conversely, a red or black body is used to represent a bearish candle, indicating that the closing price is lower than the opening price.

2. Wick or Shadow: The thin lines that extend above and below the body of the candle. The upper shadow represents the high price reached during the time period, while the lower shadow represents the low price.

Candlestick charts provide valuable information about the price dynamics and sentiment of the market. Traders and analysts use candlestick patterns and formations to identify trends, reversals, and potential entry or exit points for trades. Different candlestick patterns, such as doji, hammer, engulfing patterns, and more, can provide insights into market behavior and help traders make informed decisions.

By studying the relationship between the opening, closing, high, and low prices, as well as the overall shape and pattern of the candles, market participants can gain insights into market sentiment and potential future price movements. However, it's important to use candlestick charts in conjunction with other technical analysis tools and indicators to make well-rounded trading decisions.

Heikin Ashi is a type of candlestick charting technique used in the share market and other financial markets. "Heikin Ashi" translates to "average bar" in Japanese. This charting method aims to provide a smoother representation of price movements and reduce noise in the data.

In a Heikin Ashi chart, each candlestick is constructed based on a modified calculation of the open, high, low, and close prices. The formula for calculating Heikin Ashi candlestick values is as follows:

1. Calculate the average of the open and close prices of the previous candlestick: - Heikin Ashi Close = (Open + High + Low + Close) / 4

2. Calculate the average of the open and close prices of the current candlestick: - Heikin Ashi Open = (Previous Heikin Ashi Open + Previous Heikin Ashi Close) / 2

3. Calculate the average of the high and low prices of the current candlestick: - Heikin Ashi High = Maximum of (High, Heikin Ashi Open, Heikin Ashi Close)

4. Calculate the average of the high, low, open, and close prices of the current candlestick: - Heikin Ashi Low = Minimum of (Low, Heikin Ashi Open, Heikin Ashi Close)

By using these modified values, Heikin Ashi charts provide a smoothed representation of price movements, making trends and patterns more apparent. This technique reduces the impact of intraday price fluctuations, gaps, and other short-term volatility.

Heikin Ashi charts can be used to identify trends, reversal patterns, and potential entry or exit points in the market. Traders often look for specific Heikin Ashi candlestick patterns, such as bullish or bearish engulfing patterns, doji formations, and more, to gain insights into market sentiment.

It's important to note that Heikin Ashi charts should be used in conjunction with other technical analysis tools and indicators to validate signals and make well-informed trading decisions.

A bar chart is a type of graphical representation used to display price and volume data for a financial asset over a specific time period. It provides a visual depiction of the open, high, low, and close prices of the asset, as well as the trading volume.

Each bar on the chart represents a particular time period, such as a day, week, or month. The components of a bar chart include:

1. Vertical Bar: The vertical line represents the price range between the high and low prices during the specified time period. The top of the bar indicates the highest price reached, while the bottom of the bar indicates the lowest price reached.

2. Horizontal Ticks: The horizontal ticks or markers on the left and right side of the bar represent the opening and closing prices, respectively. The left tick represents the opening price, and the right tick represents the closing price.

3. Volume: In some bar charts, a separate bar or a line is included below the price bars to represent the trading volume during the specified time period. The volume bar indicates the number of shares or contracts traded during that time period.

Bar charts are used by traders and analysts to analyze price patterns, trends, and market dynamics. They provide a clear visualization of price ranges, as well as the relationship between opening, closing, high, and low prices. By observing the patterns and formations on the chart, traders can identify potential support and resistance levels, breakouts, reversals, and other trading opportunities.

Bar charts can also be combined with technical indicators and overlays to enhance analysis and decision-making. Popular indicators such as moving averages, Bollinger Bands, and relative strength index (RSI) can be overlaid on the bar chart to provide additional insights.

It's worth noting that bar charts are often used alongside other charting techniques, such as candlestick charts or line charts, to gain a comprehensive understanding of price movements and market behavior.

A Renko chart is a type of charting technique used to represent price movements of a financial asset. Unlike traditional candlestick or bar charts, Renko charts focus solely on price changes and filter out time.

Renko charts are constructed by using a fixed price increment, also known as the box size, to determine when to draw a new brick or block on the chart. The box size represents the minimum price movement required for a new brick to be added to the chart. If the price moves by at least the box size in the upward direction, a new brick is drawn above the previous brick. If the price moves by the box size in the downward direction, a new brick is drawn below the previous brick.

The key features of Renko charts are as follows:

1. Brick Color: Each brick or block on the chart represents a specific price movement. The color of the brick can vary, usually green or white for upward movements and red or black for downward movements.

2. Size and Time: Renko charts are independent of time and focus solely on price movement. Therefore, the bricks on the chart can have varying widths depending on the price volatility. If the price movement is larger than the box size, multiple bricks can be drawn in the same direction without any regard for time.

Renko charts are mainly used to identify trends and reversals by filtering out market noise. Traders find them useful for visualizing price action and significant price movements without the distraction of time-based fluctuations. Renko charts can help identify support and resistance levels, breakouts, and trend continuation or reversal patterns.

However, it's important to note that Renko charts may not be suitable for all trading strategies and may not provide the same level of detail as other chart types. Traders often use Renko charts in conjunction with other technical analysis tools and indicators to make well-informed trading decisions.

The Darvas Chart, also known as the Darvas Box Theory, is a trading strategy developed by Nicolas Darvas, a dancer and self-taught investor. Darvas gained popularity in the 1950s by using this method to achieve substantial profits in the stock market.

The Darvas Chart is based on the concept of following the price trend and utilizing box formations to identify potential trading opportunities. Here are the key principles of the Darvas Chart:

1. Box Formation: Darvas looked for stocks that exhibited a strong uptrend and formed a rectangular box pattern. The box is formed by connecting the highs and lows of the price action within a specified range. This range is often determined by a previous resistance level that the stock has broken through.

2. Volume Confirmation: Darvas believed that increasing trading volume was a sign of strong buying pressure and confirmed the validity of the box formation. He looked for a surge in volume when the stock broke out of the box pattern.

3. Stop-Loss Strategy: Darvas implemented a strict stop-loss strategy. If the stock's price fell below the bottom of the box, he would exit the position to limit potential losses.

4. Repeating the Process: Darvas would repeat the process of identifying new box formations as stocks continued to exhibit strong trends. He aimed to stay invested in stocks showing consistent price momentum.

The Darvas Chart strategy emphasizes trend following and momentum trading. It focuses on stocks with strong upward price movements and attempts to capture profits during sustained trends. Traders using this strategy may employ technical indicators and chart patterns to confirm potential breakouts or reversals.

It's important to note that the effectiveness of the Darvas Chart strategy may vary depending on market conditions and individual stock behavior. Traders often combine the Darvas Chart approach with other technical analysis tools and risk management techniques to develop a comprehensive trading plan.

A Kagi chart is a type of charting technique used to represent price movements of a financial asset. Kagi charts originated in Japan and are known for their ability to filter out noise and emphasize significant price reversals.

Kagi charts focus on price action rather than time, similar to Renko charts. They consist of a series of vertical lines that change direction based on predefined price movements. The direction of the lines reflects the trend of the price, while the thickness and color of the lines provide additional information.

The key features of Kagi charts are as follows:

1. Line Direction: The direction of the vertical lines represents the trend of the price. An upward trend is represented by rising lines, while a downward trend is represented by falling lines.

2. Price Reversal: Kagi charts are designed to capture significant price reversals rather than minor fluctuations. A predefined price movement, known as the reversal amount, determines when a new line is drawn in the opposite direction.

3. Line Thickness and Color: The thickness and color of the lines provide visual cues about the strength and intensity of the trend. Thicker lines indicate a stronger trend, while thinner lines suggest a weaker trend. Additionally, some Kagi charts use different colors to represent upward and downward movements.

Kagi charts help traders identify major trend changes and filter out noise and minor price fluctuations. They are particularly useful for visualizing support and resistance levels, trend reversals, and trend continuity. Traders may look for specific patterns, such as double tops or bottoms, breakouts from Kagi lines, or changes in line thickness/color, to generate trading signals.

While Kagi charts offer a unique perspective on price movements, it's important to note that they have limitations and may not be suitable for all trading strategies. Traders often combine Kagi charts with other technical analysis tools and indicators to confirm signals and make well-informed trading decisions.

A Point & Figure (P&F) chart is a type of charting technique used to represent price movements of a financial asset. P&F charts focus on capturing significant price changes while filtering out minor fluctuations and noise.

P&F charts are constructed using columns of X's and O's, which represent price movements. Here are the key elements of a P&F chart:

1. Boxes: Each box in a P&F chart represents a specific price increment, known as the box size. X's are used to represent upward price movements, indicating buying pressure, while O's represent downward price movements, indicating selling pressure. The boxes are stacked vertically to form columns.

2. Reversal Threshold: A reversal threshold determines the minimum price movement required to switch from X's to O's or vice versa. It helps filter out minor price fluctuations and focuses on capturing significant trend changes. For example, if the reversal threshold is set as three boxes, a new column of X's will be formed when the price rises by at least three boxes.

3. Trendlines: P&F charts often include trendlines, which are diagonal lines drawn on the chart to connect significant highs or lows. Trendlines help identify trend directions and potential support or resistance levels.

P&F charts provide a simplified representation of price movements and focus on identifying key trends, support, and resistance levels. They are particularly useful for long-term investors and traders who want to analyze the broader price action and filter out market noise.

P&F charts can help traders identify important price patterns, such as double tops or bottoms, bullish and bearish signals, and trend reversals. They can also be used to calculate potential price targets based on chart patterns.

It's worth noting that P&F charts have specific conventions and rules for box size, reversal thresholds, and trendline construction, which may vary depending on individual preferences or trading strategies.

Traders often combine P&F charts with other technical analysis tools, such as moving averages or volume indicators, to gain additional insights and make well-informed trading decisions.