Rare Types of Charting Styles
beside major types of charting styles , other types of charts are rarely used but they are useful too and can make big profit from the market and these types of charts are volume candle chart, baseline delta chart, scatter plot chart, colored step, heikin ashi chart , kagi chart , three line break chart, range bar chart and renko chart, etc. these are lesser known types of charts are used rarely that why there buy sell signal works more than common chart types.
Secrete Types of Charting Styles are as follows:
Volume Candlestick chart: A volume candlestick same as candlestick charts but only adds an extra dimension of information: the candle width. The higher the trading volume, the wider the candlestick body. Low-volume day’s result in skinny candlesticks. Volume is also plotted at the bottom of the chart as a series of rectangles. A red volume bar is a lower-price day and a green bar is a higher-price day. Chartists plot candlesticks on a daily basis and look for various shapes and patterns to indicate the expected direction of stock prices. Traders believe that a price trend or reversal carries more predictive power if trading occurs on high volume.
Baseline delta chart: A baseline delta chart draws a line chart that oscillates across a dotted baseline. The area above the baseline is shaded green, and the area below the baseline is shaded red. The baseline initializes to the left last major closing value on the chart but can be adjusted by dragging the handle located on the right side of the chart. This chart style is meant to highlight the positive and negative distance from the set baseline. It is typically used for “intraday” charts where the left side (baseline) is set to the opening of the market day.
Scatter Plot chart: A scatter plot is a set of points plotted on a horizontal and vertical axes. Scatter plots are important in statistics because they can show the extent of correlation. If no correlation exists between the variables, the points appear randomly scattered on the coordinate plane. If a large correlation exists, the points concentrate near a straight line. Scatter plots are useful data visualization tools for defining the trend.
Heikin-Ashi technique chart: The Heikin-Ashi technique–“average bar” in Japanese–is one of many techniques used in conjunction with candlestick charts to improve the isolation of trends and to predict future prices. Many traders use candlestick charts to help them locate such trends amid often erratic market volatility.
Heikin-Ashi Candlesticks use the open-close data from the prior period and the open-high-low-close data from the current period to create a combo candlestick. The resulting candlestick filters out some noise in an effort to better capture the trend. In Japanese, Heikin means “average” and ashi means “pace” Taken together, Heikin-Ashi represents the average pace of price actions.
Kagi chart: Kagi charts are based strictly on price action and ignore time. Kagi charts are simply line charts that change direction when prices move a required amount. There is also the added aspect of yin and yang as the lines change thickness when prices break above a prior high or below a prior low. Kagi chart is one of the various charts that investors use to make better decisions about stocks. The most important benefit of this chart is that it is independent of time and change of direction occurs only when a specific amount is reached.
Three line break chart: Line Break Charts are a Japanese chart style similar to Kagi and Renko Charts. Three Line Break charts ignore time and only change when prices move a certain amount. Three Line Break charts show a series of vertical green and red lines. Green lines represent rising prices, while red lines portray falling prices. Prices continue in the same direction until a reversal is warranted. A reversal occurs when the closing price exceeds the high or low of the prior two lines. Some of the typical uses of Line Break Charts are; finding support and resistance, spotting breakouts, and discovering classic chart patterns.
Range bar chart: Range bars take only price and volatility into consideration, therefore, each bar represents a specified movement of price while number of bar represent volatility in that period . Traders and investors may be familiar with viewing bar charts based on time; for instance, a 30-minute chart where one bar shows the price activity for each 30-minute time period. Range Bars, on the other hand, can have any number of bars during a trading session. During times of higher volatility, more bars appear on chart while conversely, during periods of lower volatility, fewer bars will plotted. The Range Bars eliminate by greater degree of the ‘noise’ that is associated with time. This is because the range bars are of equal size on every chart. The resultant charts seem smoother and also they eliminate the time factor.
Renko chart: A Renko chart is a type of chart, which is only concerned with price movement; time and volume are not included. It is thought to be named for the Japanese word for bricks, “renga”. A renko chart is constructed by placing a brick in the next column once the price surpasses the top or bottom of the previous brick by a predefined amount.
These charts are quite similar to Point & Figure charts. Instead of X-Columns and O-Columns, Renko charts use price “bricks” that represent a fixed price move. These bricks are sometimes referred to as “blocks” or “boxes.” They move up or down in 45-degree lines with one brick per vertical column.
Green bricks are used when the direction of the trend is up, while red bricks are used when the trend is down. This type of chart is very effective for traders to identify key support/resistance levels.
These are the rare types of charts used in conventional as well as unconventional technical trading with their basic information and theirs uses. In upcoming posts, we will see them in details with practical trading examples on live charts as well as professional profit making strategies specifically designed and dedicated to special type of chart.