Forex Charting Skills – Choose a Forex Chart Style

Pip Asylum have a category of training articles relating to Technical Analysis and chart interpretation that links in with our ongoing range of articles dedicated to the psychological and emotional traps involved in forex trading and how you can learn to overcome them with common sense and practical steps. If you would like more reading material on forex trading then please browse through our categories and tags at the bottom of our website.

To begin, we will always state that it is never our intention to tell you how to build every forex chart to your favorite specifications. That would be like telling you what clothes to wear or what car to drive. All we can show is which chart styles make it easy to follow the price and movement over time.

Here are 3 chart styles and what they represent :



A Japanese Candlestick Chart is very popular with forex traders. Each candlestick can have specific identifying features important to technical analysts, or a group of Japanese Candlesticks may have a particular meaning to technical analysts. Up bars (bull bars) are green – and down bars (bear bars) are red.



OHLC charts standing for (O)pen (H)igh (L)ow (C)lose are also fairly popular with Technical Analysts. The bar starts with an open price represented by a -(dash) to the left of the vertical stick; reaches a highest and lowest point and closes with a – (dash) to the right of the bar.  The bars do not have different interpretations as represented by the shape of each of the Japanese candlesticks above, so then  volatility, or price movement is determined by the length of the vertical OHLC bar itself.


Line Charts are more popular with financial analysts and economists presenting graphical price action to a set of viewers on media such as financial news programs. Typically, on a line chart only the closing price of each bar is plotted and the line very clearly represents the price movement from the lower left of the chart to the top right corner of the chart.



If you are new to forex trading, and have never before seen the effects of the currency movement between two popular forex pairs depicted on a chart, other than discovering the foreign exchange rate on your holidays abroad, then a Line Chart of the Daily or Weekly price action of any major, news driven forex pair is recommended.

If you were unfamiliar with the price depiction of the GBP (British) Pound exchange rate against the USD (United States Dollar) for the period November 2015 to January 2017, then here it is above. Reaching a highest price around $1.53 in November 2015, the GBP lost value against the USD to settle around only $1.25 in January 2017. History will always refer to this chart as the chart containing the ‘Brexit’ of the UK referendum in 2016. (See above).

Once you are very familiar with line charts, and feel comfortable with yourself being able to pick any forex pair depicted on a line chart and explain it away to a impress your friends, family or a bunch of economists, you may well want to progress to working closer with the price action and therefore depict the forex pair price versus time action on an OHLC Chart. (See chart below)

On the decision day, as a direct result of the decision to leave the EU, the GBP had an immediate shock reaction, falling in value from as much as $1.50 to the USD to as low as $1.32 to the USD. The Open/Closing price is also depicted. By the sheer length of the vertical bar depicted above, compared to other (normal) trading days of the GBPUSD. the volatility and scale of the price movement was huge and unprecedented in recent times. Study the impact of the Japanese Tsunami on the USDJPY forex pair on an OHLC Daily line chart in March 2011, and you will see similar volatile shock price action.

If you study our FOREX TRADING COURSE FOR BEGINNERS Part1,2 and 3

you will notice that we jump straight into the study of the first chart style-Japanese Candlesticks in ourintroduction to Technical Analysis. This becomes easy to follow as the course works practically together with a demo forex trading platform where you can familiarize your self with candlestick chart patterns  without risking actual money of your own. This way you will build up confidence in choosing to trade forex with the use of candlestick patterns and formations.

The actual explanation of Japanese candlesticks and the possibility or predicting future price action is the subject of several hours and months of practice – just like trainee pilots are required to have several hundreds of hours of simulation flying lessons before they can attempt to put themselves and others at risk in real conditions, so the aim of this lesson is to show only the basic setup of a Japanese Candlestick chart for any forex pair, traded globally.

The six charts above show six major currency charts, of (from top left to bottom right)  EURUSD(Euro) USDJPY (Yen) AUDUSD (Australian Dollar) GBPUSD (British Pound) USDCHF (Swiss Franc) and USDCAD (Canadian Dollar) each with an hourly interval (1hr timeframe) depicted together on one page. Each currency pair is setup with red candlesticks representing downside price movement (a decrease in value) and green candlesticks representing upside price movement ( an increase in value) of the first listed currency in the forex currency pairs.

The basic chart setup here is to set yourself up a trading template on any forex pair (not necessarily the choice of the 6 popular pairs  listed above) and to make adjustments to the color and contrast of the charts setup to your comfort. You may not like a white background, so for interest, we changed the background color to blue, yellow and pink to the top row of the charts, and changed the bottom row of the charts to depict white, blue or yellow bull candlesticks, while all the red or bear candlesticks were changed to the color black as below:


Nothing has changed with regard to the forex pairs, candlesticks, price or time frame. All that has been revealed is a new way of setting up your charts to suit your comfort and style. There are options other than standard chart setups, and it it worth experimenting until you find a color combination that is pleasing and comfortable on your trading eyes. Remember a color change won’t make your car go any faster!

If you are having difficulty in setting up your first chart template, and cannot find the required menu on your trading platform (All the above are done standard on a Metatrader platform) please email us at and we will be happy to assist you.


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