One of the best qualities of the forex market is that instead of eliminating innovation and favouring standardisation, it actually celebrates diverging viewpoints and innovative thinking. This is not something that many investment markets can claim to do because most move towards standardisation of techniques.
However, it is because of this characteristic of the forex market that there are so many debates about it. One of the debates that you will come across if you have not already is whether Japanese candlestick forex charts are actually better than bar charts.
This is a common discussion between technical traders, with some swinging one way while others swing the other. Consider the following.
Comparing Candlestick Charts With Basic Bar Charts
There is not a lot of difference between basic bar charts and candlestick forex charts. In fact, they only differ in structure and shape with most of the data represented being general.
For instance, elements which are common in both these types of charts include scaling, the overall shape, and range of highs and lows. In fact, both these charts can be used in combination with other technical tools to great effect. The only difference between the two is the way opening and closing prices are depicted.
Despite this, candlestick forex charts are considered to be better when compared to bar charts. Here are some reasons why.
Candlestick Forex Charts Tend To Be More Visual In Nature
Because of the shape and structure of candlestick charts, they end up showing patterns, shapes, and trends which are different from what simple bar charts show. In fact, candlestick charts, in a nutshell, tend to be much more visual than basic bar charts. This allows traders to read movements in forex rates in a much faster and more accomplished manner.
They Are More Useful In Assessing Sentimentality In The Market
It is also believed that candlestick forex charts are much more useful than other types of technical bar charts when it comes to assessing the prevailing sentimentality in the forex market. As the influence of sentimentality can sometimes even supersede fundamental and technical indicators, this facet of candlestick charts becomes important.
Information In Candlestick Forex Charts Tends To Be More In-depth
Another aspect of candlestick charts is that they end up showing information in a more detailed and clearer manner than basic bar charts. In other words, this means that the depth of information that candlestick charts provide is more pronounced than basic bar charts.
Pattern & Trend Recognition Is Easier And Faster In Candlestick Forex Charts
Owing to the visual nature of candlestick forex charts and their ability to show hidden patterns and trends, along with the depth of information and even the inclusion of sentimentality factors, these types of charts end up being more profitable in terms of both money and time.
For instance, most traders believe that the toughest aspect of technical analysis i.e. pattern recognition is much easier in candlestick forex charts than in basic or simple bar charts.