Bar charts are the commonly used type of chart in Forex trading. They are used by many Forex traders and they can be effective if used properly.
Forex bar charts, just like other charts of this type, have two notches on them. The left notches represent the opening prices of the currency pairs in question and the right notches represent the closing prices of them. The edges of each bar on a Forex bar chart, represent the highs and lows of the currency pair prices in question.
Bar charts unfortunately don’t bear many advantages over other types of charts used by Forex traders. However, some traders and investors in the Forex market, prefer to use them over other kinds of charts. When using charts to watch the market for currencies and the price actions of the currency pairs you trade, really all you need to do, is use a chart that works for you and you are familiar with. There is no point in using a particular type of chart, just because every other Forex trader does. More experienced currency traders do tend to use candlesticks however, which are somewhat similar to bar charts but present more advantages.
When comparing bar charts to candlestick charts, you will notice that bar charts can actually make the process of interpreting data much more slower for more experienced Forex traders. This is why more experienced traders and investors generally move onto using candlesticks in Forex trading, once they feel that they are competent enough with the technical aspect of Forex trading in general.
Many beginners first start out using line charts in Forex trading, but then later move onto bar charts before finally using candlesticks. Line charts are the most simplistic out of the three main types of Forex charts, which is why beginners tend to use them, rather than more seasoned traders. Bar charts are slightly more complex and need a bit more getting used to. Candlestick charts are thought to be the most complex sorts, however you soon get used to them after a little practice.
At the end of the day, ensure that you don’t rush anything and progress gradually in Forex trading. Charts are only one aspect of technical analysis and technical analysis itself, is only one aspect of Forex trading, so try not to get bogged down on all of this information as it doesn’t mean anything in the bigger picture. First, practice with what makes sense to you and then move on when you feel comfortable. Remember, some very successful and highly experienced Forex traders use bar charts primarily; it’s all down to personal preference, ultimately. It’s best to just use what works for you; there’s no logic in not doing so. If you would prefer to stick with a line chart throughout your entire Forex trading career and don’t feel that moving onto a different type of chart will actually benefit you, then feel free to continue using line charts.
In conclusion, bar charts are used by many Forex traders and they can be effective, in the currency market. However, they don’t bear many advantages over other types of Forex charts and they are sometimes thought to merely be a stepping stone between line charts and candlestick charts, for traders and investors. Bar charts are slightly more advanced than line charts, but slightly less complex and powerful than candlestick charts. Remember though, just use what you’re most familiar with and what works for you, because nothing else really matters as long as you are always progressing and growing your Forex trading account (or at least getting closer to profiting).