The three most popular types of charts are:

1. Line chart
2. Bar chart
3. Candlestick chart

Line Charts

A simple line chart draws a line from one closing price to the next closing price. When strung together with a line, we can see the general price movement of a currency pair over a period of time.

Here is an example of a line chart for EUR/USD.

Bar Charts

A bar chart also shows closing prices, while simultaneously showing opening prices, as well as the highs and lows. The bottom of the vertical bar indicates the highest price paid. The vertical par indicates the currency pair’s trading range as a whole. The horizontal has on the left side of the bar i the opening price, and the right-side horizontal has is the closing price.

Bar charts are also called “OHLC” charts, because they indicate the Open, the High, the Low and the Close for that particular currency.

Here is an example of a bar chart for EUR/USD.

Candlestick Charts

Candlestick charts show the same information as a bar chart, but in a nicer graphic format.

Candlestick bars still indicate the high-low range with a vertical line. However, in the candlestick charting, the larger block in the middle indicates the range between the opening and the closing prices. Traditionally, if the block in the middle is filled or colored in, then the currency closed lower than it opened.

Here is an example of a candlestick chart for EUR/USD.

In the following example, the “filled color” is white. For our “filled” blocks, the top of the block is the opening price, and the bottom of the block is the closing price. If the closing price is higher than the opening price, the block in the middle will be “black” or hollow or unfilled.

The purpose of a candlestick charting is strictly to serve as a visual aid, since the exact same information appears on an OHLC bar chart. Candlesticks are formed using the open, high, low and close.

• If the close is above the open, then a hollow candlestick (usually displayed as black) is drawn.
• If the close is below the open, then a filled candlestick (usually displayed as white) is drawn.
• The hollow or filled section of the candlestick is called the “real body” or body.
• The thin lines poking above and below the body display the high/low range and are called shadows.
• The top of the upper shadow is the “high”.
• The bottom of the lower shadow is the “low”.