The Kagi chart was created in Japan during the 1870s, alongside the early development of the Japanese stock market. Initially, this chart type was designed to quickly track fluctuations in the price of rice.
The word Kagi comes from the Japanese art of printing.
A notable feature of the Kagi chart is the absence of a time axis, making it a pure flow-based analysis tool.
To insert this type of chart, click on the + icon to add a period. Then, enter your preferred value and select the Kagi option:
The chart will then be displayed:
In this chart view, there are 4 basic elements that form two pairs of groups:
The first pair refers to the lines indicating the market direction:
Yin: A thin vertical line indicating a downward (bearish) trend. It is sometimes marked in red.
Yang: A thick vertical line signifying an upward (bullish) trend. It is sometimes marked in green.
The second pair corresponds to different types of horizontal reversal lines:
Shoulder: A horizontal segment connecting an upward line to a downward line; a local maximum.
Waist: A horizontal segment connecting a downward line to an upward line; a local minimum.
How thickness and color changes occur in a Kagi chart:
- When a Yang line falls below the previous waist, it converts into a Yin line.
- When a Yin line rises above the previous shoulder, it converts into a Yang line.
Tips for tracking the Kagi chart view
The closing price of a given period is typically used as the input data. For Kagi charts, a construction type using the high and low is also frequently utilized. In this case, low prices are factored in when the market moves downward, and high prices are factored in when the market moves upward.
When choosing a timeframe, it is worth considering that the longer the period, the greater the difference will be between the Kagi chart and real-time price action.
Customization
It is currently possible to change the color of the Kagi chart line. To do this, right-click on the chart and select 'Properties':
Select the "Price Indicator" tab, then 'Appearance', and change the 'Line' option as shown in the image:
Note: Color coloring rules cannot be applied to this line format. The line will use a single color based on the configuration above.
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