Types of Chart
Most Charting packages use Three Types of Charts
- Line Chart – Shows least amount of data.
The dots of lines are nothing but the closing price in the particular time period. So for example if you look at a daily chart. The dots of line shows the closing price of that particular stock or financial instrument on a daily basis. Well i suggest not to use it as it doesn’t give us a valuable information from a traders perspective.
2. OHLC – Also known as ‘Open – High – Low – Close’ Chart. Known as OHLC as it gives details about Open – High – Low and Closing Price of a stock. It very informative. Description (On a daily Chart) :
- Left bar Represents Price At which it Opened on that particular date.
- Right bar represents price at which it Closed on that particular date.
- Top of the middle bar represents Day’s High.
- Bottom of the middle bar represents Day’s Low.
- If the color of the bars is green means Closed Price was above the Open Price and vice-versa.
Please see the attached picture if you have questions please let me know.
3. Candle Stick – Most frequently used, in this post i shall only discuss as how to read them we shall discuss about candle sticks as indicators in a different post.
Description is similar to OHLC, its quite easy to understand a candle stick because of its appearance.
The line above and below the body of candle are called Wicks.
If the body is Green, Closed price is Above the Open Price and if its Red the Closing Price is Below Open Price.
Have a look at the picture below and let me know if you have questions.
