Long term swing trading is a common method of trading that involves having a position from days to weeks simply for catching the medium-term price movements. Forecasting of market trend, pattern, and momentum comes within it, which can be presented graphically in the form of presenting different types of charts supported on the MetaTrader 5 (MT5) platform. MT5 also accommodates various other types of charts that can be used to cater to different trading strategies and methods. For those swing traders who maintain a position for as long as possible, knowledge of all of these types as well as when to use them is essential to making good trading choices.
Table of Contents
1. Line Chart
The simplest type of chart in MT5 is the line chart. It graphs the closing price of a security over a given time interval and joins the points by a smooth curve. Though less accurate in its depiction of price action, it is extremely useful in establishing broad trends irrespective of intraday price turmoil. Swing traders also employ the use of the line chart since it provides them with a simple and concise market overview and they can easily see trend direction, support, and resistance. It does not contain specific numbers such as highs, lows, and open prices, so it is most effectively used together with another form of chart.
2. Bar Chart
The OHLC (Open, High, Low, Close) chart or bar chart is more detailed than the line chart. Each vertical bar signifies one trading period and signifies open, high, low, and closing prices. Opening price is left tick, and closing price is the right tick. Bar charts are more informative in terms of the volatility and structure of the market price, where swing traders can gauge the likely entry and exit points based on the price trend. This chart is excellent in identifying past trends in weeks or months.
3. Candlestick Chart
Among all the swing traders, the most popular one is the candlestick chart. A candlestick represents each trading session and open, high, low, and closing prices, just like bar charts, but in a more graphical way. Candlesticks can indicate bullish or bearish mood by color coding, and it can be green or white for bullish and red or black for bearish sessions. Dojis, hammers, and engulfing patterns are significant as they provide hints regarding probable reversals and continuation of trends. Heiken Ashi Chart helps swing traders detect long-term market sentiment and trade on trend power and direction of price.
4. Heiken Ashi Chart
Heiken Ashi is a Japanese term, meaning “average bar,” and an altered candlestick chart with the aim of reducing price action noise and removing noise in the market.
Unlike normal candlesticks, Heiken Ashi candles are calculated based on averages, thus creating less powerful and visually smoother trends. This enables swing traders to better establish the direction and length of the trend. Heiken Ashi charts are particularly helpful when trying to hold a position for the longer term as they restrict the ability to react to short-term false signals or pullbacks. They work best when markets are trending and can help the trader avoid emotional exits at small retracements.
5. Renko Chart
Renko charts are time-less charts with price movement only.
Instead of showing price change over a fixed time, Renko charts show bricks or blocks when price moves by distance. This eliminates the small noise and concentrates on the large, important price action. For swing traders, Renko charts also help identify trends and eliminate unwanted noise. The charts can be best used to show exact entry and exit points, especially when combined with other technical tools like moving averages or support and resistance levels. But since they do not include time, they should be used in combination with time charts to get the overall perspective.
6. Tick Chart
Tick charts plot a new bar or candle after a specific amount of trades (or “ticks”) rather than at regular time intervals.
Though day traders frequent them more because they are more precise, some swing traders use tick charts in the making of on-the-spot entries for when to enter a trade on a higher time frame setup.
For instance, if a trend is seen in the long term on a week or day chart, a swing trader may fall back on a tick chart to obtain a precise entry. However, tick charts are data intensive and may not be suitable for all long-term trading methods, especially if simplicity and general trend observation is the main aim.
7. Time Frame Selection and Multi-Timeframe Analysis
Not a chart type per se, timeframe selection plays an enormous role in MT5 swing trading.
Day (D1), 4-hour (H4), and weekly (W1) charts are the most widely employed by swing traders to analyze trends, determine stop-loss points, and define profit levels.
The application of more than one period—multi-timeframe analysis—is capable of maintaining the potential to deliver the credibility of trades. For instance, a trader can define the general direction on a week chart, define the trade on a daily chart, and detail the entry on a 4-hour chart. This time scale stacking in planning is a balance strategy to opportunity and risk.
8. Custom Charts and Indicators
MT5 supports traders to create or install custom chart types and indicators with MQL5 scripts and plugins.
Long-term swing traders have the ability to use specialty tools such as range bars, Kagi charts, or specialty moving average overlays that give information not available on basic charts.
The specialty tools can fine-tune strategy and yield improved decisions. Traders do need to master thoroughly the application of specialty indicators within sim rooms prior to applying them in real trades. The ability to host MT5’s chart engine provides the possibility of traders having the capability to tailor the platform into what they need for their own swing trading purposes.
Conclusion
Choosing a good chart type in MT5 is a critical aspect in developing an effective swing trading plan.
Though candlestick charts are the preference of the majority of traders due to their graphical data, other charts like Heiken Ashi, Renko, and bar charts can be found useful depending on market conditions and trading preference.
A skilled swing trader can make use of all charts and combines them with a good trading plan and risk management. Finally, chart-reading mastery is the most valuable method to spot profitable ideas and deal with the markets with confidence.