The chart types, side by side
Line chart
- Drawn from
- Closing prices only
- Shows each period’s high and low?
- No
- Shows the true open and close?
- The close only
- Direction is shown by
- The slope of the line
- Gaps between periods visible?
- No
- Is the latest value a real price?
- Yes
- Often used for
- The broad direction, at a glance
Bar chart
- Drawn from
- Open, high, low and close
- Shows each period’s high and low?
- Yes
- Shows the true open and close?
- Yes
- Direction is shown by
- The side each tick is on
- Gaps between periods visible?
- Yes
- Is the latest value a real price?
- Yes
- Often used for
- The range of each period
Candlestick chart
- Drawn from
- Open, high, low and close
- Shows each period’s high and low?
- Yes
- Shows the true open and close?
- Yes
- Direction is shown by
- The colour of the body
- Gaps between periods visible?
- Yes
- Is the latest value a real price?
- Yes
- Often used for
- Reading the shape of single periods
Heikin-Ashi chart
- Drawn from
- Averages of open, high, low and close
- Shows each period’s high and low?
- Yes
- Shows the true open and close?
- No: both are averages
- Direction is shown by
- The colour of the body
- Gaps between periods visible?
- No
- Is the latest value a real price?
- No
- Often used for
- Seeing a trend with less noise
How to read this table
The first three columns are three drawings of real prices, each showing more than the one before. The fourth is a calculation made from them. The rows to notice are the ones where Heikin-Ashi answers differently from the candlestick it resembles: its open, its close and its latest value are averages.
Each one, in a paragraph
Line chart
A line chart joins one price from each period, almost always the close, with a line. It is the simplest picture of where a price has been. Everything that happened inside a period is left out: how high and low the price went, and where the period began.
Bar chart
A bar chart, also called an OHLC chart, draws each period as a vertical line from its low to its high, with a small tick to the left at the open and a small tick to the right at the close. It holds the same four prices as a candlestick and draws them more sparely.
Candlestick chart
A candlestick shows the same four prices as a bar. The span between open and close is drawn as a thick body, coloured or filled one way when the close is above the open and another way when it is below; thin wicks run to the high and the low. The method comes from Japan and is the usual default on trading platforms. The body makes each period’s direction and strength easy to see, which is why named patterns are described in candles.
Heikin-Ashi chart
Heikin-Ashi means “average bar” in Japanese. Each candle is calculated: its close is the average of the period’s open, high, low and close, and its open is the midpoint of the previous Heikin-Ashi candle’s open and close. The result is smoother, with longer runs of one colour, and it lags. The prices on a Heikin-Ashi chart are not prices at which anything traded, so the last candle does not show where the market is, and gaps disappear because every open is set from the candle before.
Show me two side by side
Choose any two. The rows on which they give different answers are marked; the rest are the same for both.
Line chart and Bar chart differ on 6 of 7 rows and give the same answer on 1.
- Drawn fromDiffers
Line chartClosing prices only
Bar chartOpen, high, low and close
- Shows each period’s high and low?Differs
Line chartNo
Bar chartYes
- Shows the true open and close?Differs
Line chartThe close only
Bar chartYes
- Direction is shown byDiffers
Line chartThe slope of the line
Bar chartThe side each tick is on
- Gaps between periods visible?Differs
Line chartNo
Bar chartYes
- Is the latest value a real price?The same
Line chartYes
Bar chartYes
- Often used forDiffers
Line chartThe broad direction, at a glance
Bar chartThe range of each period
The same invented prices, drawn four ways
A drawing of the mechanism. Choose one of the chart types beneath it and the sentence says what the drawing shows.
The line chart joins the closing prices and nothing else: the path is clear, and each period’s range is missing.
Twenty-two invented periods, the same in all four panels. The Heikin-Ashi panel is calculated from them by the formula on this page. Not market data.
Questions people ask
- What is the difference between a candlestick chart and a bar chart?
- None in the information: both draw the open, high, low and close of each period. A candlestick draws the span from open to close as a thick, coloured body; a bar chart marks the open and close with small ticks on a single line. The candlestick makes direction easier to see at a glance.
- How are Heikin-Ashi candles calculated?
- The Heikin-Ashi close is the average of the period’s open, high, low and close. The Heikin-Ashi open is the average of the previous Heikin-Ashi candle’s open and close. The high is the highest of the period’s high and the two calculated values, and the low is the lowest of the period’s low and the two calculated values.
- Can I read exact prices from a Heikin-Ashi chart?
- No. Its open and close are averages, so they are not prices at which the market traded, and the last candle does not show the current price. Levels for orders are read from an ordinary chart or from the quote.
The words on this page
A general explanation for study. It is not advice or a recommendation, it does not say which of these to use, and it does not describe the terms of any account.