Chart types

Open any trading platform and the first thing you see is a chart. There are several kinds, and each one hides something the others show.

Four prices per period

Every chart divides time into periods (a minute, an hour, a day) and records four prices for each:

• Open: the first price of the period
• High: the highest price reached
• Low: the lowest price reached
• Close: the last price of the period

Together they are called OHLC. Every chart type is just a different way of drawing them.

Three ways to draw the same data

LineOHLC barsCandlesticks

A candlestick shows the same four prices with a filled body between open and close. Direction and strength are visible instantly. This is what most traders use.

The same 30 periods of EUR/USD drawn three ways. Tap a chart type.

A line chart joins the closes. It is the cleanest view of the overall direction, and the best choice when you want to see the big shape without distraction. But it throws away three of the four prices.

OHLC bars show everything: a vertical line from low to high, a tick on the left for the open and one on the right for the close. Complete, but hard to read quickly.

A candlestick shows the same four prices with a filled body between open and close. Colour tells you direction at a glance, body size tells you strength, and the wicks tell you what was rejected. This is why almost every trader uses them, and why the rest of this course does too.

Notice how the candlestick chart above lets you spot the strong periods (long bodies) and the uncertain ones (small bodies, long wicks) instantly, while the line chart smooths them all away.

Quick check

1. Question 1 of 3

   Which of the four prices does a line chart usually plot?

   AThe closeBThe highCThe average of all four