Explanation of open and close price

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1

Hi,I am Lexzykool.I am stuck in elementary school course because I don’t really understand open and close price on a chart when using a demo account.can you explain the points where the open and close prices are shown in a chart please?thanks

2

Rather depends on what type of charts you are using: bars, candles or lines. What type are you looking at?

3

I am going to assume you are looking at a candle chart. It depends on the candle. On a bullish candle, the open will be the bottom of the candle, and the close will be top of the candle (not the thin lines aka wicks). The opposite is true for a bearish candle.

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4

Just to add on what jseymour84 said. It’s the body that you should be looking at, not the wick. so for a bullish candle - lowest part of the body is the opening price and the top of the body is the closing price. Vice versa for a bearish candle.

5

Thanks.it’s a candle stick chart I was referring to but the explanation are
still not so clear.in d diagram attached to this reply,on a day Say sep12,d
size and lenght of d bearish candles for instance Is not d same.Is the open
and close price on that particular day different?that is my confusion

6

If you are looking for daily open and close prices, you need to look at a daily candlestick chart. Each candlestick shows the open, close, high and low for whatever time period you are looking at. For example, on an hourly chart, you will see each hour’s open, close, high, and low prices.

Regardless of the chart time frame, the body of the candle always shows the open and close prices of that time segment, and the top of the wick shows the high and the bottom of the wick shows the low. Open and close depends on whether or not the candle is bearish (close is lower than open) or bullish (close is higher than open).

Opens and closes will not always line up either and that is fine. There can be many reasons why, but I think for you at this point, it’s just better to accept that gaps happen, especially over the weekend, and don’t worry about why they happened.

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7

Thanks a lot for the explanation.on the chart below,what do the red and blue points on d prices they mark indicate please?

Screenshot_2017-11-15-22-51-16.png720×1280 86.5 KB

8

Looks to me like your broker’s bid and offer prices.

9

Thanks a lot.i really appreciate the answers.my next question is on how to use channels to trade support and resistance.in d lesson on trend lines,it is said that 3 points or peak of d candle must touch the line formed for it to confirm a trendline.but in this attached diagram,for the first up channel formed,3 points or wicks of the candlestick did not touch the trend line.so is this a valid up channel?

10

Secondly,how do u confirm a channel is formed or not?do I have to use a ruler to b drawing the lines each time I want to make a trade so as to know if there is a trendline or channel in a particular chart?

11

Hello,does anyone have answers to my questions please?

12

Trendlines and channels, as well as support and resistance levels, are more an art than a science. You draw them according to your own visual analysis to help define their approximate locations and positions.

Nothing is so rigid that it has to touch x number of points and traders will draw their lines in a number of different ways according to their own preference. e.g. some traders will join extreme ends of wicks, some will prefer passing through the biggest number of wicks, leaving some under and some over the line, and others will join the candle bodies rather than wicks - it is all up to you as the trader to decide what works for you.

But, think about it - the real forex market is absolutely huge in volume and millions of transactions are being made all the time for any number of reasons. So the market is hardly likely to be checking all the time whether it can trade because the rate might be outside Lexzykool’s channel lines!!!

So remember your lines are actually really a zone around which price might pause and might reverse, but there is no rule that says the market must simply because you draw a line somewhere.

In your second question are you really asking if you should use a ruler? I guess I have to assume you mean the ruler on your trading platform and not a physical ruler to draw lines on your screen? :smiley: :scream:

13

So that’s what I am doing wrong! :smile:

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14

Well that is what the Pieman said to Simple_Simon :innocent:

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15

I really appreciate the answers.thanks for taking time to explain.

16

I think the blue is the bid price and red, the ask price

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