Different types of charts and time frames – the Basic Cryptocurrency trading course


Hello dear traders, it is Petko Aleksandrov and I continue now with the different chart types that we have and the
time frames. So, the first thing I will go to is the chart types there are three
basic chart types-this is the bar chart, the candlesticks and the line chart. So, if
I just zoom in any of the cryptocurrency, let me make it a little bit bigger, the
first and most common type of chart are the candlesticks or they call them as
well Japanese candlesticks because they were developed during 18th century by
Munehisa Homma who was a Japanese rise trader and later on they were described
in the book Japanese candlestick charting techniques by Steve Nison. I
think it was who actually represented these candlesticks to the Western world
and they got really famous because they are very visual, much more visual than
the bars and the line that I will show you. So, what we have here, guys? If i zoom it each candlestick represents one hour if
we are on a hourly chart, if we go to H4 chart each candlestick represents four
hours and if I go to daily obviously each candlestick will represent daily
chart. If I put the mouse on the closing of every bar or let’s take yesterday
because today is not finished yet, if I take yesterday and if I put it on the
closing you will see that I have four values-this is the open, the high, the low
and the close. So, if I take this day for example there is a green body and there
are two lines up and down. So, the body represents the distance between the
opening and the close of the candlestick and the lines represents the maximum the price when during this day and the minimum the lowest level that the price
reached during this day. So, if I put the mouse on the closing of the bar you will see that we have four values there. We have the
opening, the high, the low and the closing price. OK? And we have the volume which
we actually do not use when it comes to trading with brokers because they show
the volume of their clients and not the global volume. So, this bar is the
distance between the opening and the close, so this day opened at this level
it went up and down, up and down and it closed at this level. OK? So, it formed a
positive day because it opened nearly at 1080 and it closed at 1140-1150 something. But it went up and down and we can see
how far it went down and how far it went up during this day. And after that we
have another day that opens and the price goes up and down and another day,
and another day, and you can see today the price opened nearly at 1258
and if it closed below this level it will form a red candlestick which means
it’s a negative day. So, the very important things we have here with the
candlesticks are the open, the closed, the high and the low of each candlestick. And
if you’re on a daily chart each candlestick represents one day, if I go
down to H1 again each one bar represents one hour. So, now is 17:55 my time after
five minutes a new bar will open H1 chart. The other type of charts are the
bar charts, so it’s the very same thing here we have these vertical lines that
represent the one hour and they show where the price went to the maximum and
to the lowest point during this hour, and they show where the bar was open and
where the bar was closed. So, you can see there are the vertical lines and then we
have these short horizontal lines on left side of the vertical line we have
small horizontal line which represents the opening. And we have the small
horizontal line on the right side which represents the closing. All right? But as
you can see it’s not really visual which bar is positive and which bar is
negative. Of course, if you get used with that you will know I mean by looking at
these lines, I can say vertical and horizontal lines I know very clearly
which ones are positive and which ones are negative. But simply, guys, with the
candlestick it’s much more visual just from the first side even you are beginner
trader it’s easy to understand which bar is negative and which bar is positive.
And the third type we have the line chart. So, normally the line is just
connecting the closing of each bar that we see on the candlesticks or on the
bars actually. It’s connecting the closing of these bars and it’s forming
the line. Obviously here we have much less information. We see where the prices
at what level, we see the movement, but we don’t see exactly at what hour where was
the price, where were the negative and the positive hours and it’s really hard
actually to do any trading with line chart, that’s why the most common ones
are the bars and the candlesticks. Obviously, there are other types of chart,
there are two lines that are representing the bid and ask price, there
are Renko charts which ignore actually the time. We have some great strategies
as well with the Renko chart. But the most common one I can say is the candlestick
because it’s much more visual and it’s much easier to be used. OK, guys? So, this is pretty much about the different chart types, it’s your choice which one you want to use and it really depends on the
strategy that we are using with the Expert Advisors, with the robots when we do
algorithmic trading. It doesn’t really matter what chart type
you use because simply we put the trading robot over the chart and it
trades according to the entry and exit conditions it has inside the code and it
doesn’t matter what is the type chart but I will talk about the Expert
Advisors later on in the course. Thank you for watching and let me know if you
have any questions. Cheers, bye.

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