A Take A Look At Kagi Charts
As you can see from the Kagi chart below, the initial point that investors will certainly discover is that the lines on a Kagi graph differ in thickness depending on what the rate of the asset is doing. We'' ve also attached a routine candle holder graph to numerous of the Kagi charts to illustrate what the rate of the hidden property has actually done to trigger a certain change to the Kagi graph. At initially, a Kagi graph can seem like a complicated series of randomly placed lines, yet in reality, the motion of each line depends on the rate and also can be used to produce really profitable trading signals.
Luckily for traders, several charting and technical analysis techniques have been developed, which attempt to filter out random noise and concentrate on the important moves that act as drivers of an asset's trend. One particular method of filtering out this noise, which is also the focus of this article, is known as the Kagi chart. Although it is not the most common or widely known technical tool, it could be one to add to your toolkit.
(For more insight, see: Trading Without Noise and Dragons, Samurai Warriors And Sushi On Wall Street.)
Kagi Chart Construction
Kagi charts consist of a series of vertical lines that reference an asset's price action, rather than anchoring to time like more common charts such as line, bar or candlestick do.
As you can see from the Kagi chart below, the first thing that traders will notice is that the lines on a Kagi chart vary in thickness depending on what the price of the asset is doing. Sometimes the lines are thin, while at other times the lines will be thick and bolded. The varying thickness of the lines and their direction is the most important aspect of a Kagi chart because this is what traders use to generate transaction signals.
(For related reading, see Analyzing Chart Patterns.)