Why Chart Type Selection Matters in Forex Trading
Forex traders rely heavily on visual data to make quick and informed decisions. The chart type you use can significantly impact how you interpret price action, identify trends, and execute trades. Different chart types offer unique perspectives, and mastering their use can give traders an analytical edge.
This is especially important when trading the best currency pairs, which often exhibit high volatility and liquidity. Combining the right chart types with proper currency pair selection on the MetaTrader 5 (MT5) platform enables more accurate analysis, leading to better trade entries and exits.
Overview of the Best Currency Pairs to Trade
The best currency pairs are typically the most liquid and widely traded in the forex market. These include:
EUR/USD – Most traded pair; tight spreads and high volatility
GBP/USD – Volatile, influenced by UK and US economic news
USD/JPY – Stable, ideal for beginners and trend-following strategies
AUD/USD – Correlates with commodity markets, especially gold
USD/CAD – Affected by oil prices and North American economic data
These pairs are favored by traders for their predictable behavior, strong trend potential, and the abundance of data available for analysis—making them ideal candidates for visual analysis using various types of chart in MT5.
Understanding the Different Types of Chart in MT5
The MetaTrader 5 (MT5) platform offers three main chart types, each suited for specific trading styles and strategies. Understanding the types of chart in MT5 is crucial for accurate technical analysis and informed decision-making.
1. Bar Chart
Displays the open, high, low, and close (OHLC) for each time period
Useful for spotting price ranges and volatility
Offers cleaner visuals for identifying breakout setups
Use case: Ideal for traders who focus on price levels and want a less cluttered chart for long-term trend analysis.
2. Candlestick Chart
The most popular chart type among forex traders
Offers visual clarity on bullish and bearish price action
Patterns like Doji, Hammer, and Engulfing can signal reversals
Use case: Perfect for swing traders and scalpers analyzing short-term price movements in best currency pairs like GBP/USD or EUR/USD.
3. Line Chart
Connects closing prices of each period with a single line
Removes market noise and simplifies overall trend direction
Lacks detailed price information (no highs or lows shown)
Use case: Great for beginner traders and those focusing on long-term trend identification in pairs like USD/JPY.
Each chart type has its pros and cons. The key is selecting the one that aligns with your trading style and the characteristics of the currency pair you are analyzing.
Matching Chart Types with Currency Pair Behavior
Not all currency pairs behave the same way, and selecting the right chart type can make a significant difference in your trading results.
EUR/USD – Best with Candlestick Charts
As the most traded currency pair, EUR/USD responds well to candlestick formations. Traders often use candlestick charts to identify short-term trends and reversal signals, especially during major economic news events.
USD/JPY – Best with Bar Charts
USD/JPY tends to trend steadily, making it ideal for bar chart analysis. The bar chart’s clear high/low display is useful for identifying key support and resistance levels over time.
GBP/USD – Best with Candlestick or Line Charts
GBP/USD can be highly volatile. Candlestick charts help spot entry and exit signals based on market sentiment. However, line charts can be helpful when zooming out to spot broader trend direction.
AUD/USD – Best with Candlestick Charts
Since AUD/USD correlates with commodities, it’s often influenced by external market news. Candlestick charts help traders react quickly to shifts in market sentiment.
USD/CAD – Best with Bar Charts
With its ties to oil prices, USD/CAD can show sharp movements. Bar charts provide the granular data needed to evaluate volatility and breakout zones.
Combining MT5 Chart Types for Comprehensive Analysis
Experienced traders often use multiple types of chart in MT5 together to gain a more complete picture of the market. Here's how you can use them in tandem:
Start with a line chart on the daily or weekly timeframe to identify overall trend direction.
Switch to a bar chart to examine key levels, volatility, and recent price behavior.
Zoom in using candlestick charts to time precise entries based on patterns like engulfing candles or pin bars.
This multi-chart approach allows you to spot both macro and micro market trends—especially helpful when trading the best currency pairs, where both fundamental and technical dynamics play strong roles.
Tips for Optimizing MT5 Chart Use
To make the most of MT5 chart variations, follow these best practices:
Use chart templates in MT5 to save your favorite chart setups for specific currency pairs.
Apply multi-timeframe analysis (e.g., daily, 4H, 1H) to confirm trend strength before entering a trade.
Avoid cluttering your charts with too many indicators—use 2 to 3 at most for clearer analysis.
Backtest your strategy using MT5’s built-in historical chart data before trading live.
Monitor market hours and volatility to align your chart analysis with high-liquidity sessions.
Mastering the types of chart in MT5 ensures better structure, clarity, and consistency in your trading decisions.
Final Thoughts: Combining Chart Insights with Strong Currency Pairs
Success in forex trading requires a blend of accurate chart interpretation and selecting the best currency pairs. MetaTrader 5 empowers traders with versatile charting tools that, when used effectively, can improve technical analysis and enhance profitability.
By understanding and applying the appropriate types of chart in MT5, traders can gain valuable insight into market behavior, tailor their strategies to fit specific pairs, and execute trades with greater confidence. Whether you prefer candlesticks for short-term trades or bar charts for long-term analysis, MT5 gives you the tools to adapt, analyze, and succeed in the forex market.
