This chart type is least informative and line charts are mostly useful for identifying trends. However, this type of chart is the least informative as it only shows the closing price for a series of periods.

Bar charts provide traders with four key pieces of information within any time frame: the opening, closing, high and low prices during each interval.

Bar charts can be viewed in many different time-frames, and hence a single bar can summaries price movements over the past minute, over the past month or even further back in time. Different traders use time-frames in various ways, although a good rule of thumb is that the longer the time-frame, the greater its significance, as it accounts for more data and hence better reflects the market’s psychology.

Candlestick charts are similar to bar charts as they also contain each interval’s open, close, low and high prices. The main difference is that the candlestick chart has a body, which represents the range between the opening and the closing prices of a particular time-frame. In this example, when the candle’s body is red, it means that the closing price was lower than the opening. When the body is green, it means that the closing price was higher than the opening. Above and below the candlestick’s body are the ‘wicks’. The top of the wick represents the highest price reached within the interval, and the bottom of the wick represents the lowest price.