Types of charts in Forex: essence, advantages and disadvantages (part 2)
In the previous review, the standard MT4 and MT5 charts were considered, which are also included in other platforms as basic. This review will consider non-standard charts that represent indicators (and sometimes advisors). You can download such charts in MT4 for free and they are installed in the platform in the usual way – through the Data Catalog.
Non-standard charts for MT4, which every trader should download
- Heiken Ashi… This is another version of the candlestick chart with one fundamental difference – the principle of calculating all 4 types of candlestick prices. You will find the calculation formula in this separate overview.
What is the fundamental difference from standard candles of this approach, no one will tell you, just like no one will tell you how the indicators differ from each other. It’s just another version of how quotes are displayed on the chart. On the basis of Heiken Ashi, separate strategies are developed in combination with various kinds of instruments, including classic moving ones. Someone is comfortable with ordinary candles, but someone will find a zest in this chart.
- Tip: when you open a deal, the order will display a completely different price than the prices of the last candlestick (which is logical due to the differences in the formula). Therefore, Heiken Ashi is a chart for assessing the trend and searching for signals, and it is worth adding a regular price line chart to it.
- Renko charts… Its display is the so-called bricks, which are able to filter out noise and create trend uniformity. They are convenient for:
- Building support and resistance levels. On a candlestick chart, extremes may not be clearly expressed.
- Search for a trend with filtered noise.
- General analysis on a graph with a simplified display.
Renko bricks are of two types – bullish and bearish. Each subsequent brick is located at an angle of 45 ° in one direction or another. Formation of blocks – based on closing prices. A change in brick colors is a signal for a trend reversal. The individual blocks of the chart have the same size and the only setting parameter is the size of each brick in points. For example, if the value is 20 points, then the brick will not be formed until the price has passed 20 points. Moreover, a block can be formed within a few minutes (on a strong trend or volatility) or for several hours (the price is in the corridor of 20 points for a long time – flat). The trader does not see the price movement within the block.
If you put a small value, then the meaning in the indicator itself is lost, since it will react to the slightest price change. On one of the forums there is a recommendation to set 1% of the asset price in points. Below is a screenshot of a Renko chart and a regular candlestick chart.
One of the opinions is not in favor of this indicator – the Renko chart does not show the real price movement, removing (smoothing) a significant part of its fluctuations and thereby somewhat misleading the trader. But there is another opinion: even if this chart is not suitable for scalpers, it can be used to build medium and long-term strategies. Well, or at least use it to find a long-term trend.
And one more addition: at the time of the news release, the Renko chart cannot be operated due to the absence of those very small movements that provoke volatility. But on the other hand, who prevents you from opening a classic chart next to it? If you want to download this chart for MT4, write in the comments. Questions may arise with the installation – as for MT4 versions, simply copying to the Indicators folder is not enough. If you can’t install it – also write in the comments.
- Tic-tac-toe. Non-standard schedule and uncomfortable just from habit. Nevertheless, there are those who use it (for an amateur). Instead of traditional candlesticks with smooth trend bends, bars are drawn on the chart either from crosses or zeros. There are no columns in which there would be crosses and zeroes. A cross is a price increase, a zero is a price decrease. Each cross / zero corresponds to a price change by the number of points specified in the parameters. The second parameter is the reversal number of noughts and crosses. There is no timeline here – this is confusing for many. If you want to download the MT4 chart – write in the comments. An example of a strategy for it you can follow this link.