On having a closer look at the different charting tools, some basic advantages and disadvantages of each system can easily be pin-pointed. Every bar charting system has a definite meaning and purpose in Emini trading. Before deciding on working with a particular charting system, it is highly recommended that dedicated Emini traders thoroughly investigate the various advantages and disadvantages of each of the charting systems in order to fully understand what each of them entails.
When it comes to price data’s and bar charts, people tend to wonder what the best method could be. If you come across a group of Emini traders and ask them what type of bar they would prefer, you’ll surely get to hear some really strong opinions. Traders are generally taught trading on specific types of bars (say for instance the candlestick bar) and get used to working with them. Generally, when traders learn specific systems, it becomes difficult for them to dislodge from them, especially if they’ve been having successful results. Even though there is a wide array of worth-considering charting methods, most people tend to overlook them.
The following are five different types of charting methods:
- Candlestick charts
- Heiken-Ashi charts
- Standard bar charts
- Renko charts
- Range charts
Candlestick
Generally, candlestick charts are the most popular charts these days. Historians generally assume that candlestick charts originated from the rice markets in Japan and were developed in the 1500’s. A candlestick typically comprises of a body, the upper wicks and the lower wicks. The traditional body segment of the candlestick chart is painted either black or white and shows the direction in which the body moved. On some of the most current charts, you’ll see the green painted portion of the body having upward movements, and downwards movements in the red painted portion.
Heiken-Ashi
This is another version of the candlestick charts, and also originated in Japan in the 1500’s. They are significantly different from the traditional candlestick charts, such that they are more trend oriented and are slightly more complex in nature. However, for Heiken-Ashi charts to be successful, some market conditions must be in existence.
Standard Bar
These charts used to be the leading system some years ago. Presently, many traders still prefer using this system to meet their trading needs. A Standard bar chart is simple to understand. It comprises of a vertical line which shows the bar time chosen by the trader. The left side of the vertical lines has a hash mark, which indicates the open, while the one on the right side indicates the bar’s close. Even though this system is the simplest, it is still necessary to note that every charting system essentially displays the same kind of data, but only in different arrangements or formats.
Renko Charts and Range
Even though these two systems are quite similar in many ways, they still have some prominent differences. Before employing this technique in trading, it is highly important that traders fully understand how it works. “Renko” literally means bricks, which is why Emini traders generally refer to Renko bars as bricks. These bars are meant to set specific chart ranges which indicate the market movement.
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