Part I. Chart types. Commander in Pips: I think you will be happy now – today we turn to talking about chart types. Pipruit: Finally! This is when the real practical stuff appears. I feel that I’m getting closer and closer to my first trade ever. Commander in Pips: That’s right. Understanding of charting is a very important issue, especially, if you intend to deal with technical analysis. Pipruit: Yes, exactly. I like the description of technical analysis that you’ve given in the previous chapter. Besides, charts look nice and it’s a pleasure (I suppose) to analyze them. Commander in Pips: In general, you’re absolutely right. It is really interesting. So let’s start with them. There are a lot of different types of charts that have an application in the real market. The most popular are: 1. Line chart 2. Bar chart 3. Candlestick chart These three types hold major information of market prices and take an absolutely major role in technical analysis. But in fact, they are just a different way to show normal price activity. It will become clearer, when you see the details. 1. Line chart This is the simplest chart type; it looks like a simple line. There is time on the X-axis and price on the Y-axis. This line links close price of each trading period – on the daily time frame, the trading period is single day, on a weekly chart it is one week. So, by linking together close prices for each trading period, we can see the price behavior during some period of time. Here is how it looks: AUD/USD LINE CHART #1 This type of charting is rarely used in modern technical analysis, because the information contain is not sufficient for comprehensive analysis. This lack of information is filled by other two types of charts – bar charts and candlestick charts. These types of charts are mostly used for technical analysis.