What´s Better For Technical Analysis in Forex, Candlesticks or Bars?

By Ronald Fallas Bermúdez (@davefbtrader)

People around the world discuss the fact of what is the best  type of chart to trade with, the real question is, what type of chart do you feel more comfortable to trade with?

In both we can observe important points of reference as the high/low, open/close but a little advantage in candlesticks is the facility to understand these parameters of a graphical way, in bars is a little more confusing, i learned to difference between positive or negative bars because the positive one has a ¨S¨ shape while the negative one has a ¨Z¨ shape, then i discovered that in MT4 platform is possible to use different colors in both types of bars, however the candlestick themselves are more attractive to your view, you can also personalize them to your color of preference.

Nowadays candlesticks has become the favored tool to analyse the market of a quick and easy way but we note that the data used by these two different analysing tools is the same, they both show the 4 basic parameters in their shape which are Open/Close, High/Low or OHLC as normally known, so why do we prefer the candlestick chart?

The difference is in the way they display the opening and closing prices, also the candlestick emphasizes in the previous day closing price to show the current closing price, but the bar chart emphasizes only in the current closing price.

If you compare both in the same chart and time frame you probably note that is much easier to point and detect the trends and reversals in the chart using Japanese candlesticks than using American bars.

The strength in the American bars chart Born’s in making the traders look at the difference between day to day closing price that will actually make you go deeper in the chart study for detecting possible patterns in the current charts.

In conclusion we just showed that both candlesticks and bars have their advantages and if you´re using candlestick charts it will not be bad to take a look at the American bars before pulling the trigger and open a trade and the same way with the bars, if you´re using them consider to take a look in the candlesticks can maybe detect something that the bars didn´t tell you and you can maybe avoid a premature entry or a loss.