What is the Best Chart Type?

There are three dominant chart types when it comes to trading - line, bar and Japanese candlestick. Of course there are other types but these are used by the vast majority of traders and this is why our trading expert David Jones decided to explain them in a bit more detail.

The first and oftentimes default chart type is the line chart. Simply put it consists of a line that is formed by connecting the closing price levels for every day, hour, minute (or other selected timeframe) forming a continuous line. What price level is displayed can be changed to show the opening price, the high or the low for the day, but the default one (and widely accepted) is the closing price.

As line charts can only show one component of the price movement many traders use the bar chart, as it consists of four data points – the Open price, the Close price, the High and the Low for the time period. This chart type was widely used up until the mid-nineties and is still preferred by many.

But it is the Japanese candlestick that is considered by most to be the superior chart type. It’s essentially an upgrade on the bar chart, as it has the same four components in it but its visual representation (reminiscent of a candlestick with two wicks on both of its ends) is easier to see by the human eye and makes the process of interpreting it a bit quicker.

David also discusses the pros and cons of the three most popular chart types. You’ll be able to understand their importance for setting Stop Loss and Take Profit orders, as well as what you can discover by zooming in and out on charts.


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The information contained within the video was correct at the time of recording but may have since changed.

At Trading 212 we provide an execution only service. This video should not be construed as investment advice. Investments can fall and rise. Capital at risk. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

[majwor]

Hey David...I feel like Im in school again...lol You make a great teacher....Very good line of videos you have made on trading tactics and strategies. Very explanatory. Thank you!

[mikeparker]

I much prefer renko trade bars to candlestick, works great with a moving average.... i program bar color to smi direction because it often predicts change of direction a few candless before the break.

[felipe]

for me, line is better for seeing market structure, in most cases the wicks doesnt give any helpful information, because it was something that happened on the lower time frame that is not as relevant as the open and close on the actual time frame you are watching

people also get too emotional trying to interpretate wicks

[FC_YENISEY_]

Please, realize changing colors of the candles, bars and others. 👏👏👏

[ozkanb]

Hi thanks for the video. Great quality as always. Can you please make a video about Elliott waves?

[nano]

@ David Jones I have been watching a lot of video's about making a account with Trading 212 but the 1 thing I have not see is how to get the lets say I put £500 in a acc with Trading 212 and I make in 1month £50 and i want to put that in my bank acc how can I do this hope you can make a YouTube video on this ty

[mojgankhani]

Hi,
How can I see both clandestick chart and line chart, both at the same time?

[maxofaolain]

How do you get this desktop version you’re using

[vigneshkumar]

Sir can you make video about candle stick and what the upper wik and lower wik will indicates

[arashheidari]

a few times I repeated this question, but didn't replay from you, I ask again, in many videos you point the reference book, can I know the name of this book?