Types of Charts

There are three types of charts used by traders depending on the type of information they need. These chart types include line charts, bar charts, candlestick charts, and point and figure charts.

Line Charts

Line charts represent only the closing prices over a set period. While this type of chart doesn’t provide much insight into price movements, many investors consider the closing price to be more important than the open within a given period. Line charts also make it easier to follow trends.

Bar charts

Bar charts are considered an expansion of the line chart since they add the daily price range being open, high, low, and close. The chart is made of a series of vertical lines that represent the price range for a given period with a horizontal dash on each side that represents the open and closing prices.

Candlestick Charts

Like a bar chart, candlestick charts have a vertical line showing the price range for a given period, which is colored differently showing whether the stock ended higher or lower. The difference with the bar chart is a rectangle that represents the difference between the opening and closing prices.

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