While there are several different types of charts, they are all shown on two axes. The horizontal axis represents time, while the vertical axis represents price levels, as shown below.
Now let’s move to three main types of charts.
Line charts are simply drawn by connecting closing prices. Each closing price is connected to the previous closing price over a specified time interval to make a continuous line. As only the closing prices are shown, line charts can be easy to understand and give a quick glance of the overall price movements.
On Webull, you will see the line chart in two colors, green or red. It tells you intuitively if the price has fallen (red) or risen (green) during the time frame. As you can see below, the price has risen from point A to point B, thus the line is green.
The bar chart, or OHLC (opening, closing, high, and low) chart consists of a series of price bars representing price movements for a specific period.
Each bar consists of one vertical line and two horizontal lines, as shown below. A vertical line connects the high and low prices during the time interval. The left horizontal line indicates the opening price, and the right one shows the closing price.
Investors could tell how volatile a security is over the specified time interval by looking at the height of the bar.
On Webull, if you change the line type to Bar Chart, the bars are shown in only one color, as shown below. This gives more information than line charts and eliminates the interruption of color.
If you change the line type to Colored Bar, the bar is green if the closing price is higher than the opening price and red if the closing price is lower than the opening price. This can help investors to observe market sentiments and analyze stock trends better.
The candlestick chart provides the same price data (open, close, high, and lows) as the bar chart, only in a different form.
Just like in a bar chart, the opening and closing prices are shown in two horizontal lines. The difference is that a box is made by connecting the two horizontal lines. A single vertical line is drawn in the middle of the box to connect the high and low prices. Compared with a bar, a candle gives a clearer sight of the difference between opening price and closing price.
If the closing price is higher than the opening price, the candle is green, indicating that the security closed higher over the specified time interval. If the closing price is lower than the opening price, the candle is red, indicating that the security closed lower over the specified time interval.
Tips:
1. You can customize the color of all your charts (except for cryptos) by tapping Watchlists>Setting>Ups/Downs Color.
2. Read our lesson to see how to change line type.
*Finally, please note that technical analysis is not 100% accurate. The interpretation of results is generally subjective.
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