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Chart Types

The information on this page is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.

This is a basic introduction to chart types. If you know the basics definitions, we would suggest skipping this page.

Line Chart

  • The most basic chart type, with the line connecting only closing prices
  • Simple to read and provides a good indication of trend
  • Pros: Closing price often considered most important
  • Cons: Lack of information on what happened during each period

Line Chart

Bar Chart

  • More information on each period’s trading range (open, close, high, low)
  • Vertical line shows high-low range
  • Horizontal dashes indicate open (left) and close (right)
  • Bars are black if close is higher than open, red if lower
  • Pros: Offers more intra-period information than line chart
  • Cons: Analysis of bars requires closer examination

 
Candlestick Chart

  • Candlesticks display the same data as Line Charts, but more clearly
  • Trading range shown by vertical lines (wicks/shadow) protruding
  • Open and Close lines straddle wick and form a box/body when joined
  • If Close is above Open, body usually coloured green/white/open;
  • If Close is below Open, body red/black/filled
  • Pros: Colours and body make ranges and trends easier to identify
  • Cons: Colours can differ depending on user settings

Point & Figure Chart

  • Less popular but beneficial for identifying key support and resistance
  • Easy to see reversals and major break-outs/break-downs
  • Each box represents a defined price move, based on price and volatility
  • For example each ‘X’ could represent a 5% rise and each ‘O’ a 5% fall
  • Pros: Removes noise of insignificant moves; time not a factor
  • Cons: Only shows a move after the event

Time frames

All charts can be configured for any time-frame and interval  (e.g. daily tick chart; 1-week 5 mins; 1-year daily) except Point & Figure which is focused on price moves and not time. This allows one to look at short/medium and long-term periods before deciding on the trading period of interest. Most chart packages allow users to customise graphs.

Caveat

Individual technical indicators shouldn’t be relied upon in isolation for trading decisions, however strong the signal. Others should be consulted for extra help, while price (price, price patterns, support/resistance, moving averages, trendlines) and volume should confirm continuation or change of trend. Trend should always be respected as pre-empting a change can prove costly.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.