Technical Analysis · Beginner · 5 min

Line, bar, candle: three ways to show the same price

You can tell line, bar and candlestick charts apart and say what each one shows and hides.

Three views of one price

Open any trading app or finance website and you will see price drawn as a line, as a row of thin bars, or as a row of small boxes with lines sticking out. They look like three different worlds.

They are not. All three are built from exactly the same numbers. The difference is how much of each period's story they let you see. Once you know that, no chart will look foreign to you again.

How each chart works

Every price chart splits time into equal periods: one minute, one hour, one day, one week. That period length is the timeframe. For every period, four prices are recorded:

Together they are called OHLC. The three chart types are three ways of drawing these four numbers.

Line, bar and candlestick chart The same twelve periods of price data drawn three times: as a line through the closing prices, as OHLC bars and as candlesticks. LINE BAR CANDLE

Line chart. A line chart usually connects only the closing prices. It is clean and great for seeing the big picture over months or years. The downside: it hides everything that happened inside each period. A day with a huge swing and a quiet day can look identical.

Bar chart. A bar chart (also called an OHLC chart) draws each period as a vertical line from the low to the high. A small tick on the left marks the open, a tick on the right marks the close. All four prices are there, but at a glance the bars are hard to read.

OHLC bar A single OHLC bar: a vertical line from low to high, a tick on the left marking the open and a tick on the right marking the close. HIGH top of the line OPEN left tick CLOSE right tick LOW bottom of the line

Candlestick chart. A candlestick chart shows the same four prices, but fills the space between open and close as a box, the body. Its color shows direction: here green when the close is above the open, red when it is below. Thin lines above and below the body reach to the high and the low.

Candlestick charts are commonly traced back to rice traders in 18th-century Japan. They became widely known in the West in the early 1990s. Today they are the default view on most trading platforms, and they are the view Wickwise teaches with.

Seen on a chart

Take four days of a fictional stock:

Line, bar and candlestick chart Four days of a fictional stock as line, bar and candle chart. The line shows only a small dip on day three; the candle shows a large bearish body and a wide range. LINE BAR CANDLE

On the line chart, day 3 is a small dip from 105 to 101. Nothing dramatic.

The candlestick chart tells more. Day 3 opened at 105, fell as low as 100 during the day and closed at 101, near its low. You see a long red body: sellers pushed price down for most of the day. The line chart contains none of that, because it only knows the closes.

Common mistakes

The takeaway

Line, bar and candle charts show the same prices. Candles just make the fight inside each period visible at a glance.

Check yourself

Quick quiz

4 questions. Instant feedback, nothing is saved.

  1. 1What does a standard line chart usually connect?

    Most line charts connect closing prices. Everything that happened between open and close is hidden.

  2. 2A stock opens the day at 50 and closes at 48. How does that day look on a candlestick chart?

    The body spans open and close. Close below open makes it a bearish candle.

  3. 3Tap the panel that shows each period as a filled body with thin lines above and below.

    Tap the chart.

    Line, bar and candlestick chart Chart for the question: Tap the panel that shows each period as a filled body with thin lines above and below. LINE BAR CANDLE

    That is the candlestick chart: the body runs from open to close, the wicks reach the high and low.

  4. 4Why does Wickwise teach mainly with candlestick charts?

    All three types use the same data. Candles are simply the fastest to read.

of 4 correct.

Sources