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Trade using bid chart or ask chart?

  • #1
  • First Post: Nov 30, 2015 6:47am Nov 30, 2015 6:47am
Hi, I have been trading for a while now and have been trading using a BID chart, recently I've discovered the option to use an ASK chart which changes the candlesticks I see quite a bit. I understand that if I'm thinking about buying I should use the Bid chart and sell on the Ask chart (Or is it the other way around? Ive never tried it before)

My question is : On which chart do I do my analysis in general? The candles change quite a bit if I change between the ASK and BID chart, and since my trading system is based on candlestick patterns it's confused me quite a bit
  • #2
  • Edited 2:47pm Nov 30, 2015 2:09pm | Edited 2:47pm
you always buy on the ask price and sell on the bid price,
so if you use a ask chart for buying, you will get a clearer picture where you will be filled.
for technical analysis it really don't matter much if you use a ask or bid chart,
the candles you see is almost the same no matter if you use a bid or ask chart,
the difference is usually very tiny. unless you are charting some stock or exotic currency pair.

I don't know which trading platform you are using?
but if mt4 there is no ask charts, only an ask line you can add if you want.
anyways, ask and bid is nothing you need to be concerned about,
unless you are trading something with a huge spread.
in those cases you need to take the spread into your calculation on bid and ask charts,
depending on the direction you are taking, for order placement and stoplosses.

for technical analysis you usually do a top down approach,
you begin with the highest time frame and work your way down.
you then use the highes timeframe for direction, the medium for trading,
and the lowest as trigger charts. anyway thats my take on it,
there are probably hundreds of different ways to do it.

if you visit babypips.com they have many useful things you could learn.
Bulls are stupid Animals!especially when Im short!
  • #3
  • Nov 30, 2015 4:44pm Nov 30, 2015 4:44pm
Quoting roughtrader
you always buy on the ask price and sell on the bid price, so if you use a ask chart for buying, you will get a clearer picture where you will be filled. for technical analysis it really don't matter much if you use a ask or bid chart, the candles you see is almost the same no matter if you use a bid or ask chart, the difference is usually very tiny. unless you are charting some stock or exotic currency pair. I don't know which trading platform you are using? but if mt4 there is no ask charts, only an ask line you can add if you want. anyways, ask...
Thank you very much for the help and all the information, I really appreciate it!
  • #4
  • Dec 1, 2015 11:51pm Dec 1, 2015 11:51pm
Excellent question, and I would have to say 100% is that you should trade with "bid chart". The reality is when we backtest, we are always basing things on what the bid was. Al thought we "buy on the ask, and sell on the bid" simply look at how many times a price has nearly touched your pre-determined entry or missed it by .1 pip, in which if you had a pending order to the buy side, your trade would of been activated prematurely. Not to mention when you back test and see those 30-50 pip candle on the lower tf, a bid chart will never show you what the ASK would of been, thus making your calculations not accurate. I, Personally, use bid charts, and have even programmed my EA to take long positions based on what the bid price is. So say I want to long, the EA will only open a buy order once the BID price closes at or above a per-determined price, and as long as the bid isn't over x amount.
  • #5
  • Dec 2, 2015 7:16am Dec 2, 2015 7:16am
Quoting ProjectELi
Hi, I have been trading for a while now and have been trading using a BID chart, recently I've discovered the option to use an ASK chart which changes the candlesticks I see quite a bit. I understand that if I'm thinking about buying I should use the Bid chart and sell on the Ask chart (Or is it the other way around? Ive never tried it before) My question is : On which chart do I do my analysis in general? The candles change quite a bit if I change between the ASK and BID chart, and since my trading system is based on candlestick patterns it's confused...
Your question put me stumped.
I'd be very interested to know what trading system do you use, if the difference of the spread is so important to it?
Plus my opinion that there is no difference. At the opening of buy order, in the ask position, the order is nevertheless closed in the bid position. So...
Looking for partners
  • #6
  • Nov 2, 2020 4:21am Nov 2, 2020 4:21am
Quoting roughtrader
you always buy on the ask price and sell on the bid price, so if you use a ask chart for buying, you will get a clearer picture where you will be filled. for technical analysis it really don't matter much if you use a ask or bid chart, the candles you see is almost the same no matter if you use a bid or ask chart, the difference is usually very tiny. unless you are charting some stock or exotic currency pair. I don't know which trading platform you are using? but if mt4 there is no ask charts, only an ask line you can add if you want. anyways, ask...
Thanks for sharing!!!
  • #7
  • Nov 2, 2020 3:54pm Nov 2, 2020 3:54pm
Thanks a lot for info update!
  • #8
  • Last Post: Nov 4, 2020 12:14am Nov 4, 2020 12:14am
Quoting roughtrader
you always buy on the ask price and sell on the bid price, so if you use a ask chart for buying, you will get a clearer picture where you will be filled. for technical analysis it really don't matter much if you use a ask or bid chart, the candles you see is almost the same no matter if you use a bid or ask chart, the difference is usually very tiny. unless you are charting some stock or exotic currency pair. I don't know which trading platform you are using? but if mt4 there is no ask charts, only an ask line you can add if you want. anyways, ask...
Such a neat article is not usually seen. Thanks
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