Line, Bar and Candlestick Charts

Line charts

One point per period at the close, joined by a line. It hides everything that happened within each period, which is exactly why it is useful for seeing the overall shape of a trend or for comparing two instruments without clutter. It is also the chart most beginners find easiest to read, and there is nothing wrong with starting there.

Bar charts

Each bar is a vertical line from the low to the high of the period, with a tick on the left for the open and a tick on the right for the close. Bars carry the same information as candles in a thinner form, which some traders prefer on crowded charts. They are common in futures and equities and less so in forex.

Candlestick charts

Each candle has a body from the open to the close and wicks to the high and low. The body is coloured by direction: green or white if the close is above the open, red or black if below. Because the body's size and colour show at a distance who won the period, candles let you read a chart quickly, and they are the basis of a whole vocabulary of patterns, some of which the next lesson covers.

Heikin-Ashi and others

Platforms also offer averaged candles such as Heikin-Ashi, and charts based on price movement rather than time such as Renko and range bars. They can smooth noise, and they also hide real prices, so a stop set from a Heikin-Ashi chart can sit somewhere the market never traded. Learn ordinary candles first.

Key takeaways

• Line charts show closes only; bar and candle charts show open, high, low and close.
• Candlesticks make direction and strength visible and are the forex standard.
• Use line charts for shape and comparison, candles for trading decisions.
• Averaged charts hide real prices; learn plain candles first.