Forex glossary
Kagi Charts
A Kagi chart draws connected price lines that reverse after an opposing move exceeds a chosen threshold. Line thickness changes after prior highs or lows are breached under the platform's rules. Horizontal spacing does not represent equal time periods; threshold and input data affect construction.
Illustrative example
How does it work in practice?
Assume a fixed two-dollar Kagi reversal threshold and an upward line reaching 110. A retracement to 109 is insufficient, while reaching 108 meets the hypothetical rule for reversing the line's direction.
A case to work through
A move absent from the close
A hypothetical rising line reaches 50; reversal threshold=3, intrabar low=46 and close=49.
- A fuller stream records an opposing move of 4, exceeding the threshold.
- Close-only input records a retracement of 1 and may not represent that event.
What follows? Compare charts using the same input and threshold.
Example boundary: Detailed construction depends on the platform; lines are not equal time units.
A useful distinction
Kagi Charts / Renko Charts
Kagi reverses lines after a reversal threshold; Renko builds bricks of a specified size.
Check your understanding
Distinguish an intrabar path from its closing observation.
Show the answer and explanation
No; the retracement is 2
It does not reach the threshold of 4.
Volatility and transformed data
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Related terms
Sources and documentation
- TradingView – Kagi
Reversal thresholds, line construction and dependence on source resolution.
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The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.