A forex opens high low close (OHLC) chart is a tool that is used to denote the movement of a currency over time. The vertical lines on the OHLC chart illustrate the highest and lowest prices of the currency over a unit of time. The tick marks on either side of the bars denote the opening and closing prices of the day. Traders and analysts frequently use an OHLC chart to spot trends and stock movements on a short term basis.
Each segment of an OHLC chart provides you with information such as high and low ask prices and also open and close prices for a certain period of time. In other words, the whole trading range can be observed. This can be better illustrated with this diagram:
Forex Open High Low Close: Spot the Trends
If all the components, i.e., open, high, low, close, are equal or close enough, then you know the trend is pointing north. The range between the low and the high represents volatility. The up and down movement on the chart also reflects the trends and patterns for a winning trade. The analysis becomes difficult when the market trends are mixed. If there is a gap on a bar, there is a high likelihood of a weak trend. It’s your job to check the reasons for this trend. The market sentiments are a strong factor in deciding the trends. Your chances of making a successful trade lie in spotting those trends and that is where open and close come in handy to interpret the trends in a clear, concise manner.
Forex Open High Low Close: OHLC v/s Candlestick
The primary difference between the OHLC chart and candlestick is the way they display opening and closing prices. The OHLC shows the difference for a particular session, while the candlestick shows the closing price compared to the previous day’s closing price. The OHLC also displays signs of pattern development, which enables the trader to make a better movie.
Key Takeaways of Open High Low Close
It can be applied to any timeframe.
The OHLC normal uses the normal of the open, high, low, and close (or last) cost, and is a typical specialized pointer setting in many trading platforms.
At the point when the nearby is over the open, the bar is regularly hued black. At the point when the nearby is underneath the open the bar is frequently shaded red.