The trading chart is displayed in the Trading view widget and provides all the essential tools to help you make informed trading decisions. The chart illustrates fluctuation of prices over a certain time period. The horizontal axis (X-axis) represents the time scale, and the vertical axis (Y-axis) indicates the price level.
You can switch between bar, candle, Heikin Ashi, line, area and baseline views, as well as specify the time period for which data should be displayed. Multiple customization options are provided, allowing you to configure the chart according to your preferences.
The chart supports numerous financial indicators (such as moving averages and regressions) and can feature a variety of custom shapes (including arrows and lines, pitchforks and various ranges), allowing you to perform an in-depth market analysis.
A time frame defines the time period encompassed by a single chart unit (such as a candlestick or a bar). You can specify intraday (1-minute, 5-minute, 15-minute, 30-minute, 1-hour, 12-hour), daily, weekly or monthly time frames.
For example, intraday time frames can be used when you need to have a more detailed view at the data: highly granular charts (such as those based on a 5-minute time frame) can be useful in predicting short-term price fluctuations. However, this entails introduction of a lot of random noise along with extreme volatility. The overall picture tends to be distorted as a result of huge price spikes, price gaps and wide high-low ranges.
Using weekly and monthly time frames is preferred when it comes to revealing large-scale patterns and predicting long-term price movements. In most cases, however, you should consider using both short-term and long-term time frames: wider time-frames are useful for getting the general picture and considering the price action in a broader perspective; once you have the large picture, a more granular time frame can be used to zoom in on the data obtained for the last few months, days or hours.
The trading chart can represent data in a variety of popular formats, including line, bar, candlestick and Heikin-Ashi, which are described below.
Line charts convey a single piece of trading information, which is typically the last price traded within a specific time frame. Moreover, for some indices and thinly traded assets, only closing data might be available, rendering line charts the only available option for proper data visualization.
Bar charts belong to the most commonly used chart types. To plot a bar chart, the data on high, low and close prices should be available. The open price data is not mandatory and is only used when available. The high and low prices are represented by the top and bottom sections of a bar. The open price is indicated by a short horizontal line extending to the left of the bar, while a similar line extending to the right indicates the close price.
Bar charts come most handy when you need to plot a large amount of data, which the Candlesticks chart cannot handle. Each bar is relatively thin, making it possible to fit more bars into a chart before it gets cluttered. Line charts are also less cluttered compared to candlestick charts, but they are less detailed at the same time (since they do not convey the high-low range). Bar charts that do not include the open price are the best choice for analyzing the close price dynamics relative to that of the high and low prices.
To plot a candlestick chart, the data on the open, close, high and low prices should be available. The candlestick chart makes it easy to grasp the relationship between the open and close prices. Green candlesticks indicate an upward price movement (when the close price is higher than the open price), while red candlesticks indicate an uptrend (when the close price is lower than the open price). The difference between the open and the close prices is represented by a vertical red or green rectangle, called candle body. The lines extending above and below the body (called shadows) indicate the high and low prices for a corresponding period of time.
A Heikin-Ashi chart is similar to a Candlesticks chart but uses a different approach to calculating and plotting chart candles.
In a regular candlesticks chart, each candlestick indicates four different prices (open, close, high and low), while each candlestick is independent from others and unrelated to the previous or next candlestick. A Heikin-Ashi chart, in contrast, makes it easier to analyze trends, since it essentially indicates an average of the price movement: there is a tendency with Heikin-Ashi for the candles to stay red during a downtrend and green during an uptrend, whereas regular candlesticks alternate color even if the price is moving dominantly in one direction.