There is an option to change your chart graph to a different view that suits your trading strategy and supports your technical analysis tools. Bitsgap has collected the most popular graph patterns: Candlesticks, Bars, Line & Area. Each chart type has its pros and cons. Based on the information or trend you are looking for you will need to select different chart patterns. Our article will expand a little more about each type of chart and describe how you can use it for your daily trading.
To change the view of your graph, simply find a highlighted button on your trading chart menu and select any available chart pattern. In a second, the chart will reload itself and present you a brand new data.
1. Bars chart
Bar charts remain one of the most traditional trading chart types since its present a set of information while relatively easy to read and interpret. Each bar consists of the open, close, high and close price that happened during a selected interval set by a trader. Bar charts illustrate the direction where the price moved (upward or downward), as well the degree of how far the price went during the bar. The price action traders can make decisions based on the movement of those price bars.
Here is a description of how you can read a bar chart and explanation of each part of the bar:
- Open - the open is the first price where trade occurred during the bar formation, and is indicated by the horizontal foot on the left side of the bar.
- High - the high is the highest price traded during the bar formation and is indicated by the top of the vertical bar.
- Low - the low is the lowest price traded during the bar formation and is indicated by the bottom of the vertical bar.
- Close - The close is the last price traded which ends current bar formation and is indicated by the horizontal foot on the right side of the bar.
- Direction - the course the price has run during the bar formation indicated by the positions of the opening and closing feet. If the closing foot is above the opening foot then the price went upward progress during the bar. If the closing foot is below the opening foot then the price went downward progress during the bar.
- Range - The range of the bar indicated by the areas of the high and low of the vertical bar.
2. Candlesticks chart
Candlestick charts are one of the most used, and favorite chart patterns among traders and professionals. It presents a wide range of trading information while the design is simple to read and interpret into clear trading message or signal. The chart named due to its markers and indicators having a body in the form of a candle with a line on top that resembles a wick (these candles may have a wick on the bottom as well).
Candlesticks just like bars present a set of information of the opening, closing, highest and lowest price during the course of candle development. It also illustrates the degree of price movement highlighted by candle color and length. One of the most significant thing about learning candlesticks and other chart types is that you can acquire the necessary knowledge to combine with your studies of additional technical analysis tools and develop your trading strategy based on the candlesticks patterns. Getting comfortable with reading and understanding candlestick charts will provide you exceptional opportunities to see when and where the trade could happen.
- Open - the open represents the first price where the trade happened during the candlestick development, the opening price could be a top or a bottom of the body.
- High - the high is the highest price for which asset traded during the candlestick development. The top of a tail that occurs above the body identified as the upper tail.
- Low - the low shows the lowest price which traded during the candlestick development. The low of a tail that occurs below the body identified as the lower tail.
- Close - the close is the last price traded which ends current candlestick formation. It can be a top or a bottom of the body based on the candle color. The open position always stays the same while closing can be modified as the price moves.
- Direction - the color of the candlestick presents a direction of the price moved during the selected time frame. In our example, we have blue candlesticks representing the price moving above the opening position. If the candlestick is red, it means that the price closed below the opening price.
- Range - the price difference between the high and low tails shows a range of the price movement during a selected time frame. In most cases, the wide-ranging candles indicate a high degree of volatility, while small range candles give a picture of low volatility or market uncertainty.
3. Line charts
Bar and candlestick charts show the most detailed information about open, close, high and low positions determined by its time frame. Sometimes in smaller time frames, it is hard to decide where the price is moving and we have to consider all closed position to see what is the market mood. A line chart comes into use when we want to get closing price only information.
Each closing price is connected to the next closing or forming price direction with a single continuous line. It provides a quick summary of where the price of an asset is moving.