Most online stock charts will allow you to switch between types. The three main types are bar charts, candlestick charts and line charts. While traders seem to have strong opinions about their preference, I recommend that my stock option coaching clients be open minded about what works best for them.
A bar chart show the open price by the horizontal line on the left side of the vertical line. The closing price is on the right side of the vertical line. The top of the vertical line shows the high price of the day. The bottom of the vertical line shows the low price of the day. The color of the bar is green when the close is higher than the open. The color of the bar is red when the close is lower that the open.
A candlestick chart is normally green or red. If it is green, the open price is at the bottom of the green colored candle body and the close price is at the top of the green colored candle body. The vertical line below the body shows the low of the day. The vertical line at the top of the body shows the high. If there is no vertical line on top of a green candle, that means that the close price was the high price of the day.
A line chart often has red and green segments. You guessed it! Red for down and green for up. There is no data for open and close price. A line chart will quickly and easily give your eye a clear look at trends.
Check out your online stock charting package and experiment with these 3 types of charts. What are your preferences and why?