Forex, Commodities, Equities and Bullion, whatever it may be, there are 3 types of Charts available. They are:
- Line Charts
- Bar Charts
- Candlestick Charts
Line Chart: When we draw a line adding one closing price to another closing price, we can see the Line Chart. See the example below:
With Line Chart, we can see the price movement over a period. But we cannot see the exact price movement of the particular period.
In Bar Charts, we can see the Open, High, Low and Close Price of the particular period. See the example below:
In Bar Chart, Vertical Bar shows the High and Low of that particular period. Left hash shows the Open Price and Right hash shows Close Price.
Candlestick Charts also shows the same information as Bar Charts, but it looks easier and comfortable to read information. See the example below:
In Candlesticks also Vertical line indicates High and Low price of the period. The middle block indicates Open and Close. See the Candles below:
In Candle, middle block is called as Real Body and those wicks are called Shadows, namely Upper Shadow and Lower Shadow.
Candlestick Charts are very useful for reading Technical Analysis.
In Line Chart or Bar Chart or Candlestick Chart, we can see the information periodically. We can see the price movements in 1 Minute, 5 Minutes, 15 Minutes, 30 Minutes, 1 Hour, 4 Hours, Daily, Weekly and Monthly. They are called Time Frames.
So when we see a particular Period or Time Frame, the Bar or Candlestick shows the entire movement of that particular Period. Rather we can say that, that price movement belongs to that particular Period. For example, if we see 1 Hour chart, each Bar or Candle shows the price movement for that Hour.