Okay i think of that:
low and high prices are prices indicated from our brokers, am i right? but what is open and close price?open is well someone has just hit the buy or sell price and close is when someone has hit the close order button? and then a summary is compute from the number of guys that has choose open or close the the period we have choose to show?
And when we are in the order window, the prices that change every second are indicators from our brokers that are guessing the the sell or buy will close on the next second?
im a little comfused
The charts are not just from your broker, they should mimic the market
as a whole.
Open is the price at which the candle for a specific period has opened, in
Forex usually the same as the close price (but not always)
Close. the price at which the candle has closed.
High, is the high of the candle or day.
Low, is the low of the candle or day.
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i have read the lesson of the school. i know what is supposed to be but i cant imagine it. can someone give me an example?
I am not sure I understand the question. I am gonna break it down to the basics just in case.
I suppose you are talking about the high, low , open and close of candles right?
A chart displays the price, generally the ‘bid’ price of a pair. Most of the time you do not see the ‘ask’ price on the chart by default. So the candles are representation of the Bid price over time.
Your chart software receives the bid price in ticks. A tick is basically a small chunk of data updating prices at the current price. Ticks does not come perfectly regularly, but for this example, lets suppose you get one every second. Every second your software receive a new bid price for your pair.
What you see in the order window is a tick chart.
Supposing your software is metatrader4 you can see a tick chart another way:
in the subwindow ‘market’ right click on one of the pairs, select tick chart.
The tick chart is simply a curve showing the last received bid prices, with lines.
If you read the following link, the tick chart is a ‘line chart’.
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However if you want to see the chart for an entire day, you cannot plot every single ticks, there are too much. You will, for example, plot only the price of the last tick of each hours. That would be a H1 line chart, H1 meaning you have one point for 1 Hour.
But plotting a single bid per hour you loose some information. Because during one hour the price moved up and down. Idealy you also want to plot the highest price and lowest price that happened during the hour. That is what a candle chart does, or a bar chart does. Instead of plotting just one point, you plot 4 points per hour: the open price, the close price, the highest price of the hour, and the lowest price of the hour.
Here’s an attached image as an exemple of how candles are formed with time:
at 7h59 in the morning you can see the black candles.
The open and close of candles have nothing to do with selling or buying, it is just just the price at the start/end of a period of time, be it an hour, a minute or a day depending of your choice. If you choose a M15 chart for example, you will plot one candle every 15 minutes.
In a candle chart, the open price should be equal to the close price of the preceding candle. If it does not, it means you missed some data, for example because your broker stopped the data feed during the week end, or simply because your are plotting a chart at very low timeframes and you can see the gaps separating each ticks.
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when you say the highest price of the hour what do you mean?the highest price that someone has buy or sell?
No, you cannot see what other people do directly, nor what prices they get.
It is the highest price your broker offered you during the hour.
the open and close price is the average open and close price that happen during a time period? because open and close prices happen every second am i right?
Nope, there is not open and close price every second. The ticks you receive every second (or so) will only update the bid and ask prices.
The open price of a candle is simply the bid price of the first tick received within the hour, for an hourly chart. I.e it is the price at 8h00 and 0 second (for the 8th hourly candle of a day).
The close price is the bid price received in the last tick of the hour. I.e, the price at 8h59 and 59 seconds (for the 8th hourly candle of a day).
I think you are mixing this up with the open and close price of an buy or sell order, but that is another topic. Open and close price of a candle has nothing to do with buying or selling.
Consider this line chart from 7h00 to 10h00, this is simply a plot of the bid price over time:
The second chart is an hourly candle chart. In green, the four prices of interest for the candle of 8h00: open, close, high and low.
yes!! that was my mistake. now i understand.
thank you very much for your time Orpexo
Thank you so much Orpexo. I avoided forex trading for over 10 years until now because I didn’t understand the issue of open, high, low and close. Now, I’m so glad that my fear is gone. Thank you so much Sir,