Introduction to Technical Analysis

Introduction to Technical Analysis

Charts and Analysis

Line Chart

This chart is the simplest and doesn’t give much information. A line chart just has a line drawn from one closing price to the next closing price. So, all you see in a line chart is a series of closing prices.

Bar Chart

A chart is a graphical representation of historical prices. The most common chart types are bar charts and candlestick charts. Although these two chart types look quite different, they are remarkably similar in the information they provide.

A bar chart reveals slightly more information than the line chart. You see both closing and opening prices in a bar chart. So, if you look at a 1-hour chart, each bar represents 1 hour. A bar in a 1-hour bar chart shows the price it opened within that hour and the closing price of that hour. In addition to that, it also shows the highest and the lowest prices of that hour.

Bar and candlestick charts are separated into different timeframes. Each bar or candlesticks represent the high, low open, and close price for a specific period.

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