Charts are one of the most useful tools of trading in Binomo–they allow you a window of insights into what is happening with a certain product. Charts tell a story, and it’s a story that you can use on your ends and for your benefits. And not only does it tell you a story of what has happened to it – you’re a witness to the story as they unfold.
In this article, we’ll tell you all you need to know about charts as well as the 4 different Binomo chart types that you can use on the Binomo platform.
Why Charts Are Important
Charts are important for one main reason: you read the signs of the financial world in charts. Sometimes they tell you that large-scale investors like funds and banks like the company you’re looking at, as indicated by those sweet, continuously climbing lines. Sometimes the lines would plummet, and you know it’s because people are dropping the sack-like red hot stones.
Another thing one has to understand about charts is that, if you don’t use it, you’re like a doctor without an X-ray machine or a driver with a blindfold on. If you’re a trader not using charts, you’re basically a bird flying blind. And you know what happens to those who fly blind, right?
This is why we compiled this list for you: to better acquaint you with one of the most useful tools that you will encounter on the Binomo trading platform.
Identifying Different Binomo Chart Types
Learning to read the story that charts tell may be intimidating at first – but with a little knowledge and a lot of practice, reading charts will become second nature. Soon, you’ll be breezing through them as you search for those sweet winning stocks.
And the first step towards all that learning and knowledge is knowing the four different Binomo chart types. So without further ado, let’s get into it.
Line charts are one of the most basic chart types used in financial markets – and Binomo as well. It is a graphical representation of the price action over some time and is depicted by lines connecting a series of points. They’re often used to picture day-to-day market action, but can be used on any time frame.
A good advantage of line charts is that they are simple to understand and enable you to digest a lot of historical information in a glance.
However, a disadvantage of it is that it often lacks nuance in information if you’re looking for more involved analysis.
This chart type is a lot like the line chart. Mountain charts have dips and peaks akin to a mountain range, with the space below the jagged line often filled with certain colors. They are often also called ‘area charts’ and are a good way to grasp a lot of historical information over long periods quickly.
However, mountain charts can sometimes have different scaling methods to compress long term data into a short, comprehensive, and readable line. This can lead to optical illusions and should be analyzed carefully before making a decision.
Candlestick charts, also known as Japanese candlesticks, are one of the most widely used chart types in Binomo–and for a good reason. They display a wealth of information that can hardly be rivaled by any other charts.
Candlesticks comprehensively display the price action of the asset one is tracking over a period of time. It is composed of the body and the wick.
The borders of the thick body depict the closing and opening price while the upper and lower borders of the thinner wick depicted the maximum and minimum that the prices went to.
Green depicts a rise in prices since the opening, and red depicts that the prices have decreased since the opening. Each candlestick may represent either five minutes to months.
One advantage of the Japanese Candlestick chart is that it displays a wealth of information over a short period of time. However, a disadvantage of the candlestick is that it can get overwhelming and intimidating for new traders.
Bar charts look somewhat like the Japanese candlestick and are rooted in the same principle. They are depicted by vertical lines with protruding lines that determine the opening and closing prices.
They differ from candlesticks in the sense that the previous emphasizes the color of the lines to judge the direction of the action — much suited to judge market action on the same day. Meanwhile, the bar chart is more focused on the comparison between the opening and the closing prices on the prior times.
The main advantage of the bar chart is it displays complicated information elegantly. However, as with the candlesticks, reading them requires a lot of studies and a lot of experience to get it right.
The most popular chart
There’s no doubt about it, the candlestick chart is the most popular chart among professional traders in Binomo. This is because it balances the wealth of information with ease of use–colors are easier to judge and make for an engaging trading experience, as it allows traders a deep fundamental analysis of the asset which most charts cannot compare to.
Then again, all the charts on the Binomo platform are quite valuable! This does not mean that the others have no use since you can incorporate all of them into your trading strategy.
Excited to start trading? Don’t forget to hop over to the official Binomo website and sign up for your free demo account now!
Good luck on your trading journey with Binomo!