Stocks Chart Types: Line, Candle and Bar

A Trading chart is a graphical representation of price movement of a instrument over a given period of time.

Drawn on a grid and the user is at liberty to select which chart time-frame they want to trade with. Stocks trader may choose to use hourly charts, daily charts or even 1 minute chart timeframes.

To draw charts, Three methods are used. Methods used to draw the charts defines the type of chart.

The 3 types of charts are: - Candlesticks Charts - Bar Charts

1. Line charts
2. Bar charts
3. Candles charts - Most popular

Line Chart

A single line is plotted from one closing price to the next, forming a continuous line.

This type of chart provides very little information on the chart and is therefore not very popular among traders. In fact this type of chart is rarely ever used.

Line Chart in Stock - This type of chart leaves out important data about price movement. Information such as opening, high and low point of the price which are not represented on the trade graph.

This makes this type of line chart to be considered sketchy by technical analysts.

The chart below highlights example of a line chart.

Bar Chart

Stock Bar Charts - This type of chart shows the opening, closing, the high & the low, for a specific price interval & is represented by bars that look like the ones plotted below - hence its name bar charts

• Bar Charts - bar chart has a vertical bar showing the total price movement.
• Left horizontal bar the opening
• Right horizontal bar the closing
• High and low denoted by the highest and lowest point

However, these bar charts aren't very easy to work with, especially when they are not magnified. It becomes very hard to interpret the bar charts with ease when trading the market thus making them not very popular among traders.

A Bar chart that is not magnified makes it hard to view the opening & closing price as highlighted by this example:

Candle Chart

Candlesticks Charts - This is the most widely used type of charts, they resemble candlesticks, thus their name - candlesticks charts.

Candlesticks charts shows opening, closing, the high & the low of a particular price interval.

The range between the open price and the close price is known as the body of the candlestick.

Stocks candles charts is most popular type of charts among online traders because it's easiest to interpret when trading the market. Stocks Trading candle charts also gives a lot of data about the price movement. This makes candles charts the most widely used type of charting in Stocks.

Candlesticks Charts

Shown Below is example of candlesticks charts. To learn more about stocks candles charts, read this topic: Analysis of Japanese Candles Setup Patterns in Stocks.

How to Select These Stock Chart Types in MetaTrader 4 Software

To draw any of the types of charts on the MetaTrader 4 Software a trader can use the buttons below found on this MT4 platform.

Drawing Stock Charts in MT4

• To Select a Bar Chart Click the Bar Button Key

• To Select a Candles Chart Click the Candlestick Button

• To Select a Line Charts - Click the Line Button Key