Let me explain…
The first one is what we call a line chart.
It simply looks like a line on your chart:
One thing to bear in mind is that the line chart uses the closing price only.
The bar chart takes into consideration the open, high, low, and close only:
The candlestick chart takes into consideration the open, high, low, and close, but it colors the body compared to the bar chart:
How to interpret different types of Forex chart
As I've mentioned, there are different types of chart that you can use.
Point and Figure, Kagi, Line chart, Renko, Baseline, Area, Hollow Candles, etc.
But I'm just going to share with you the three that I just mentioned:
You can change the settings whether you want to use the closing, opening, high or low price:
The line chart is usually very good to help you define a market condition whether is it in an uptrend or range.
Because it's usually very clear to cut out any clutter or the wicks flying around on your chart.
This is, simply put, the bottom of the bar is the low, the lowest price of the bar.
And the top of the bar is the high, the highest price of the bar.
The left thing that you see sticking out is basically the open.
The right thing that you see sticking out is the close.
Here’s what I mean:
So, this is how you see the open, high, low, and close.
One thing to bear in mind is that a bullish candle and a bearish candle, the open and the close are in opposite direction.
It basically confused me at a start when I was new to trading, but trust me…
It will make sense to you eventually.
Compared to a bar chart, the candle chart basically shows you the color of the body, showing you the momentum of the move.
The bar chart does show as well but it's not as obvious to the naked eye.
When you look at candle chart, the picture is more easily summarized.
The candlestick chart looks like this...
They have the open, high, low, and close:
Don't worry if you don't really know how to read a candlestick chart.
Because I have a free candlestick training course that you can check out.