Top 8 Stock Chart Types For Trading & Investing

Choose The Right Kinds of Stock Charts For Your Trading. 8 Types of Charts, Line, HLC, OHLC, Candlestick, Market Profile, P&F, VAP & Equivolume.

The 8 important stock charts traders and investors use are Line, Bar, Candlestick, Volume at Price, EquiVolume, Point and Figure, and Market Profile Stock Charts.

Stock charts come in many shapes and sizes. From the differences in the bars to the concepts applied to the chart. Here you will find a reference guide to the many types of charts available with an overview of their potential uses.

Stock Chart Types

The simple line chart is used for long-term trend assessment; the OHLC and Candlestick charts show the open, high, low, and close prices. VAP and Equivolume charts add volume data to the chart analysis. Finally, Market Profile and Point and Figure charts remove the timeline X-axis from chart analysis.

The Line Chart is the simplest, depicting only the closing price. The High Low Close Chart shows the price high low & close. As we move to OHLC, Japanese Candlestick, and Point & Figure Charts, a new world of understanding supply and demand is unleashed.

We explore the best eight stock chart types and the benefits of each.

8 Different Types of Stock Charts: Pros & Cons With Examples
8 Different Types of Stock Charts: Pros & Cons With Examples

8 Important Stock Chart Types

  1. Line Stock Charts
  2. High Low Close Bar Stock Charts (HLC)
  3. Open High Low Close Bar Stock Charts (OHLC)
  4. Japanese Candlestick Charts
  5. Volume at Price (VAP) Stock Chart
  6. EquiVolume Stock Charts
  7. Point and Figure (P&F) Charts
  8. Market Profile Stock Charts

1. Line Stock Chart

A line stock chart is a type of chart that shows the price movements of a security over time. The line stock chart plots the closing price of the security over time on the vertical axis and the time periods on the horizontal axis.

The line stock chart is the simplest chart type providing the least amount of information. The line chart is commonly used for depicting long-term stock price direction, where daily price volatility information is unnecessary.

The line in the top pane is drawn using the close price for each unit of time. So if this is a daily line chart, the close price for the day is used. If this is a 5-minute chart, then the close price for every 5 minutes of trading is used.

Line Stock Chart
Line Stock Chart

Line Stock Chart Pros

Line stock charts provide a simple view of stock price movement. Suitable to use when comparing the performance of many stocks on the same chart.

Line Stock Chart Cons

Line stock charts do not show the price open, high, low, or close for the trading period. The day’s trading range is essential in price-based decision-making as it indicates bullish or bearish momentum.

Stock Charting Software With Line Charts


2. Stock Market Bar Chart (HLC)

The High Low Close (HLC) bar stock chart is a step up from the line chart as it allows us to plot additional useful data on the chart. Each bar represents a trading period with the stock price High, Low, and Close.

An HLC stock chart is a graphical representation of a security’s price over a set period of time. The y-axis represents the security’s price at various points in time, while the x-axis shows the duration of the chart. The lines on the chart represent the high, low, and close prices for the security over the specified time period.

The purpose of an HLC stock chart is to give investors an easy way to visualize a security’s price movement. This type of chart is especially useful for those new to investing, as it can help them better understand how prices fluctuate over time.

There are a few different ways to interpret an HLC stock chart. One way is to look at the trend of the security’s price. If the security’s price is consistently rising, it may be a good time to buy. On the other hand, if the security’s price is consistently falling, it may be a good time to sell.

High Low Close Bar (HLC) Chart
High Low Close Bar (HLC) Chart

HLC Bar Chart Pros

HLC charts enable more stock price information, showing the range of the days trading, meaning did the stock price close near its high (bullish) or near its low (bearish)?

HLC Bar Chart Cons

The negative of HLC charts is that no opening price is reflected in the graph. The opening price is vital as it allows us to immediately see if the price gapped up or down on the open and where the closing price is in relation to the opening price.

Stock Charting Software With HLC Bar Charts


3. Stock Bar Chart (OHLC)

An Open High Low Close (OHLC) stock chart is a type of chart used by traders to indicate a security’s open, high, low, and close prices for a specific period of time. The OHLC acronym stands for “open, high, low, close.”

The open price is the first price traded during the period. The high price is the highest price traded during the period. The low price is the lowest price traded during the period. The close price is the last price traded during the period.

The OHLC Stock Chart is a useful tool for traders because it shows the price action of a security over time and can be used to identify trends.

For example, if the open price is lower than the close price, this is considered a bullish sign, and vice versa. If the prices are trending up, this is considered an uptrend, and if the prices are trending down, this is considered a downtrend.

Open High Low Close Chart (OHLC)
Open High Low Close Bar Chart (OHLC)

OHLC Charts Pros

OHLC is the complete stock market bar chart. OHLC is the chart of choice for those who like to use simple charts that depict the day’s trading range, including the open and close prices.

OHLC charts allow you to instantly see if the trading period closed higher or lower than the open. We can also see the length of the bar, which shows us the volatility or the strength of the daily price action.

OHLC Charts Cons

There are a few downsides to the OHLC chart type, and many investors and traders use it. Most chart packages also allow you to color the up days green and the down days red. Japanese Candlestick charts are the next step for those who prefer even more predictive information in a stock chart.

Stock Charting Software With OHLC Bar Charts

  • TradingView: The Number 1 Stock Charting & Analysis Package & Trading Community.
  • Stock Rover: The Best Value, Dividend & Growth Stock Screening & Portfolio Mgt.
  • TC2000: Best For US Stock Trading & Chart Analysis
  • TrendSpider: Best For Automated Technical Chart Analysis
  • MetaStock: Best for Backtesting, Forecasting & Trading Systems

4. Japanese Candlestick Charts

A Japanese candlestick chart is a type of financial chart that displays the price movement of a security over time. It is similar to a bar chart, but it uses candlesticks instead of a line connecting the closing prices. Each candlestick represents the price action over a certain period of time, typically one day. The candlesticks are often used to identify trends and reversals.

Rice traders developed the Japanese candlestick charting technique in Japan in the 18th century. It is thought to have been introduced to the West by Steve Nison in his 1991 book, “Japanese Candlestick Charting Techniques.”

Candlesticks are typically composed of a body and two shadows. The body represents the open and close price for the period, while the shadows represent the high and low prices for the period. A candlestick is considered bullish if the open price is lower than the close price and bearish if the open price is higher than the close price.

The length of the body and the shadows can provide clues about the intensity of the price action. A long body indicates strong buying or selling pressure, while a short body indicates little price movement. Long shadows indicate that prices were volatile during the period, while short shadows indicate that prices were relatively stable.

Candlesticks can be used to identify a variety of patterns, including reversals, continuation, and exhaustion. These patterns can be helpful in making trading decisions.

Japanese Candlestick charts are now widely considered the de facto stock chart for experienced traders. Candlesticks provide an excellent insight into current and future price movements. The bars are called candlesticks because they look like a candlestick with a wick and the main body.

Japanese Candlestick Chart
Japanese Candlestick Chart

Candlestick Chart Pros

Candlestick charts give an excellent view of the open, high, low, and close asset prices. Candlestick charts are visually illuminating and make market supply and demand easier to spot. Candlestick chart patterns allow us to judge the future short-term direction of price. Candlestick charts connect investor psychology with the price pattern.

Candlestick Charts Cons

Mastering Candlestick charts can be complicated and time-consuming due to the number of Candlestick patterns and rules you must memorize.

Although Candlesticks have many advantages, they can seem like information overload to the beginner. Luckily a few stock charting software companies have now implemented automated Candlestick recognition.

Automated Candlestick Chart Recognition

Before you jump into a headlong three months of studying and analyzing Japanese Candlesticks manually, I highly recommend you use the power of modern stock charting algorithm software to recognize patterns for you.

Three of our recommended stock charting software have automated Candlestick pattern recognition that better identifies and analyzes candlesticks than humans can. Give them a try.

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Further Reading on Japanese Candlesticks.

Stock Charting Software With Candlesticks Charts

  • TrendSpider: Best Automated Candlestick Pattern Recognition
  • TradingView: Best Free Automated Candlestick Pattern Recognition
  • MetaStock: Best Candlestick Trading System Add-on
  • Stock Rover: Value, Dividend & Growth Stock Screening & Portfolio Mgt.
  • TC2000: Best For US Stock Trading & Chart Analysis

Stock Charts Using Volume

The use of volume in technical analysis is essential as volume allows us an insight into the supply and demand situation. The following charts incorporate volume into the price window to provide additional information.

5. Volume at Price (VAP) Stock Chart

A volume at price (VAP) stock chart is used to measure the percentage of a security traded at or above a certain price. This type of chart can be used to identify potential support and resistance levels.

Volume at Price (VAP) Chart
Volume at Price (VAP) Chart

The VAP can be used to identify potential support and resistance levels. If the VAP is consistently high at a certain price, this may indicate strong buying interest at that level. Similarly, if the VAP is consistently low at a certain price, this may indicate strong selling pressure at that level.

The VAP can also be used to help confirm trends. For example, if the VAP is consistently rising along with the security price, this may indicate that the uptrend is likely to continue. Conversely, if the VAP is falling while the security price is rising, this may indicate that the uptrend is losing steam.

The volume at price (VAP) chart is an exciting development, as instead of showing volume for a specific period, it shows us the number of trades at a particular price level.

The volume at price (VAP) chart lets us see at what price level most market participants believe the stock is reasonably priced.

VAP Chart Pros

Volume at price charts are an innovative and intuitive charting method; combined with standard X-axis volume bars. You can see market psychology both in time and price. Volume at price charts makes it easy to see volume increasing as price rises; this is a very bullish sign.

VAP Chart Cons

Very few stock charting packages offer Volume at price charts.

Stock Charting Software With Volume at Price Charts

  • TradingView: Our Number 1 Stock Charting & Analysis Package
  • TC2000: Best For US Trading & Stock Analysis

6. EquiVolume Stock Charts

EquiVolume charts attempt to visualize volume and price differently. Instead of plotting volume in separate bars below the price, Equivolume charts incorporate volume into the width of the price bars.

The wider the price bar, the more shares were traded during that period.

EquiVolume Stock Chart
EquiVolume Stock Chart

An EquiVolume stock chart is a type of stock chart that shows how many shares of a particular stock are being traded at a given point in time. This type of chart can help determine whether a stock is being actively traded or not. Additionally, EquiVolume charts can provide insight into a stock’s overall price direction.

Equivolume Chart Pros

Equivolume stock charts are visually impressive and extremely easy to interpret.

Equivolume Chart Cons

Equivolume stock charts can distort the timeline running across the x-axis. This makes drawing accurate trend lines more challenging. Additionally, very few stock charting services offer EquiVolume charts. I would not recommend using EquVolume as a tool.

  • TradingView Supports Equivolume with a Pine Script Called [RS Volume Bars].

7. Point and Figure (P&F) Charts

Point and Figure (P&F) Charts are a type of chart used to track price movements. They are created by plotting a series of X’s and O’s, where each X represents a price increase, and each O represents a price decrease. P&F charts can be used to identify support and resistance levels, as well as to track trends.

P&F charts differ from other types of charts, such as candlestick charts or bar charts, in that they only consider price changes and do not consider time. This makes them useful for long-term investors who are less concerned with short-term price fluctuations.

P&F charts can be used to trade various assets, including stocks, commodities, and currencies.

Point & Figure charts are very unusual as they feature no timeline along the bottom X-axis. The P&F chart is made up only of price swings. The P&F vertical price bar is arithmetic and shows only units of price.

A “0” is plotted if the price moves down a whole price unit (for example, 50 cents). Then when the price changes direction and starts to move upwards, an “X” is marked in each box. This filters out smaller price moves and lets us focus on trend quality.

Trend lines are always plotted either horizontally or at 45-degree angles.

Point & Figure Stock Chart (P&F)
Point & Figure Stock Chart (P&F)

P&F Stock Chart Pros

Point & Figure charts are excellent for performing stock price target calculations. Point & Figure charts are simple to learn and interpret as there are very few price patterns to learn.

P&F Stock Chart Cons

Learning this type of charting can be easiest when performing the charting by hand. That means you are marking the “X” and “O” on a piece of paper. This can also be very time-consuming. Very few services offer Point and Figure charts.

Stock Charting Software With Point & Figure Charts

  • TradingView offers excellent Point and Figure charting that is well worth investigating.

8. Market Profile Stock Charts

Market Profile charts were developed in the 1980s by the Chicago Board Of Trade Pitt Trader J. Peter Stiedlmayer. The letters on the chart show time units. “A” represents the first 30 minutes of trading, and “B” represents the second 30 minutes.

Market Profile Chart - Old School and Cool
Market Profile Chart – Old School and Cool

A market profile stock chart is a graphical representation of the demand and supply for a security at different price levels. It can be used to identify areas of support and resistance, as well as potential market turning points. Market profile charts are created by plotting the number of shares traded at each price level during a specific time period.

One of the benefits of using market profile stock charts is that they can provide a more detailed picture of market activity than traditional price charts. For example, a market profile chart can show you the price at which most shares were traded and the range of prices at which trading activity occurred. This information can be helpful in making investment decisions.

The point of control is the area (price range) where most trades occur during the day.

The value areas are the price range at which 70% of the action happens. When the price is above and below the value areas, this represents a possible ideal buying or selling point.

Market Profile Chart Pros

People who use market profile charts become evangelists for the cause. They believe it offers unique insights into buy and sell opportunities. It can be a good option if you are a quick-fire day trader.

Market Profile Chart Cons

Learning to use Market Profile charts can require quite an effort, and very few stock chart services offer this type of charting. One of the few charting packages to offer market profile charts is TradingView.


Different Stock Chart Types Compared

Stock Chart Type Trading Charts Chart Details Usage Popularity
Line Stock Charts X Low Easy High
High Low Close Bar (HLC) X Medium Easy High
Open High Low Close (OHLC) High Easy High
Japanese Candlestick High Difficult Medium
Volume at Price (VAP) High Medium Low
EquiVolume Medium Medium Low
Point and Figure (P&F) High Medium Low
Market Profile High Medium Low

The Best Chart Type for Day Trading

My experience suggests the best chart type for day trading is a Candlestick chart with Volume at Price (VAP) overlayed on a 1-minute per bar arithmetic chart setting.

Ideally, you would add to this chart a price volume indicator.

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The Best Stock Chart Types for Long-term Investing

For long-term investors, the best chart type is an OHLC chart set to 1 day per bar. This chart should provide ample detail for long-term investors, especially if you only check your investments every month.

Overlaying a longer 50-bar moving average on the price pattern will also clearly indicate the medium-term stock price direction.

Stock Chart Types Summary

According to technical market analysts, Candlestick, OHLC, VAP, and Point & Figure charts are the most popular and useful stock chart types. Automated Candlestick pattern recognition is highly recommended for short-term day and swing traders.

As you can see, there are many charts; the ones I would recommend are OHLC Bar, Candlestick Charts, and Price at Volume Charts. However, the choice is yours.

Some people refer to investing in the stock market as gambling. I do not see it this way. With the vast array of technical and fundamental data available, you have a wealth of information at your fingertips. Knowing how to use it is vital.


Video: 8 Different Stock Chart Types

Candlestick Pattern Recognition & Analysis Software
Candlestick Pattern Recognition & Analysis Software

3 COMMENTS

  1. Market profile stock charts certainly must be a goto for day traders. Gotta spot activity during each time frame.

  2. I have to say that for the past few of hours i have been hooked by the amazing articles on this blog. Keep up the good work.

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