Linear Drawing

The linear drawing is the first type of drawings. It is built by connecting the values of prices for a chosen moment of time. The one-day drawing is the most common one. Despite the fact that for its building, different methods could be chosen, most of the traders use the closing prices for creating drawings. The basic disadvantage of that drawing is the lack of possibility for tracing the prices movement during the day.
The linear drawings are thought to be insufficient for a technical analysis, because of the advantages of the other modern instruments for a graphic maintenance, so that no data is lost.
The one-day linear drawings are suitable for observation of the wide picture of the basic background trend, where the prices movement during the day looks insignificant The linear drawing is more appropriate for a visual study than the others. Besides that, when on the technical analysis are put drawing figures, the linear drawing is the most suitable for identification or building of such figures and taking decisions, better than the other drawings. In addition to this, as far as the linear drawing is unbroken, its disadvantage is the lack of possibility interrupting “windows” to be seen on the prices’ drawing.

Histogram

Nowadays, the histogram is thought to be the most popular from all types of drawings. On it there are the following four important points:

• The highest and the lowest during a given time period, which are connected with a vertical line;
• The price of opening, which is marked with a short segment from a horizontal line, pointing left;
• The price of closing, which is marked with a short segment from a horizontal line, pointing right.
• The price of opening does not really matter for the technical analysis, except in the cases when the opening starts with a “window”.

Apparent advantage of the histogram is that it shows all prices during an unit of time. The most common from them is the one-day histogram. Another advantage is that on the histogram as a difference from the linear drawing appear the “windows”, which actually exist at the market of the currency futures. Despite the fact that the market of the currency futures works day and night, physically it is open during about a one third of the trade day. The Chicago market opens at 7.30 am and works 14 hours. Between the prices of two working days, there could be formed “windows”. Maybe that is why the histogram is the most popular among the futures’ s market traders.

Japanese candles

The Japanese candles are similar to the histograms. Like them, they take four basic prices: “high”, “low”, “open”, “close”
At the “Japanese candles” the opening prices and the closing prices form the body “candle” (jittai). In order to be clear that the opening price was higher than the closing price, the body of the candle stays empty (white). In their original look (in Japan) a candle like this is red. The electronic graphics instrument allow the candle to stay empty or to colour itself in a colour, chosen by the man, developing the program. If the closing price is lower than the opening price, the body of the candle fills up. Generally, candles like these are black, but at the electronic exhibition, they could be filled up with any other colour or hatched.
The price movement during the day (or the week) of the Japanese candle is displayed in the shape of a top shadow (uwakage) and a bottom shadow (shitakage), which are vertical segments, connecting the body of the candle respectively to “low” and “high” prices.
The same as on the histogram, on the drawing “Japanese candles” not all movements of the prices up and down during the day (minute, hour, week) are visible.