Trading UDOs is very straightforward and easy to understand, but in order to actually be a good trader you need to dig a little deeper into analyzing trends and start educating yourself about the various types of price charts. Charts are great because they show you how the price of an asset has changed throughout time, in relation to various economic events. This in turn, helps you make better prognosis for future price movements. All these factors impact your trading and profitability in the long run, so pay close attention to them.
Different chart types stress on different points and each one has its up and downsides. You should decide which one suits your strategy and trading style best. Here are the three most widely used chart types.
This is what is considered to be the most standard chart. It consists of lines which connect the price levels from the different time periods. Usually a line chart is used for showing indicators that only have a single daily value.
This type of chart shows the asset`s change in price for a given day by utilizing vertical placed bars. It shows the highest and lowest prices of the asset for the day. The starting price is shown by the left hand notch and the ending price is shown by the right hand notch.
You can think of the candlestick chart as a more sophisticated bar chart. It shares similarities but it`s more detailed and gives a better visual overview of the price movement. You have the daily beginning value and the price movements which are portrayed in the following way:
- a green rectangle showsa day with an upward trend
- a red rectangle shows a day with a downward trend
The wick illustrates the range for the whole day, while the rectangle illustrates the overall range from the beginning. What most traders will do is use the candlestick chart for short periods, like one day. The great thing about this type of chart is its easiness of navigation.