Line charts are also called close-only charts and for good reason. They take the closing prices of a given period, connect the consecutive points and create a line to represent their move.

Technical analysis today needs to be as accurate as possible, and a line chart doesn’t give the details of a trading session.

Many analysts favour line charts for their simplicity, since they regard the closing price of a session as the most important information to know. Dow (from Dow Jones) was one of these analysts.

Although more detailed charts are favoured by most, they can get really cluttered and don’t allow traders to spot events like a tight divergence.

Line charts display a clear trend direction, chart patterns and they can spot support/resistance levels, sometimes more accurately than other chart types.

Bar charts were the most widely used charts before candlesticks were invented in the 18^th century. They provide a more detailed representation of prices, since they display the closing price like a line chart, together with the opening price, and the highest/lowest price points reached in a session.

Knowing the added details, a trader can have a visual representation of the volatility of the security during a session. The opening price is always on the left, while the closing price is on the right.

Colours green and red, provide a quicker display of bearish or bullish sessions, making them more accurate than simple line charts. The colour of the bar, is chosen after calculating the difference between current closing price and previous closing price of the session rather than the open and close.

Candlestick charts, are the most commonly used charts in technical analysis. Their origin was traced back to the 18^th century in Japan, tracking the price of rice, and they became very popular ever since.

They display the same information as bar charts, but in a different format. Wicks on top and below the bar display the highest/lowest prices of the session.

Colours green (or white) and red (or black) are also showing bearish and bullish sessions, but they take into consideration the opening and closing price of a session, rather than the closing of the previous session. The colours show the “real body” of the candlestick.

A new bar or candlestick is formed after a specific number of trades (ticks) have occurred, instead of after a time period.

A single bar might form in seconds during high activity or take minutes to form during a slow period.

This approach compresses low-activity periods and expanding high-activity periods, for a dynamic market representation.

Provide a clear, simplified view of price movements by filtering out noise. These charts use columns of X (for rising prices) and O (for falling prices) to visualize price moves.

Can be subjective, as traders must set a “box size,” the price increment that must be reached to plot a new X or O. A “reversal amount,” typically three boxes must also be set (the price must move in the opposite direction before a new column of Xs or Os is started).

Best suited for position trading aiming to capture broader market moves rather than short-term trading.

A preset reversal amount is determined (fixed amount, percentage, or based on Average True Range, and only when reached, a new line is plotted on the chart, ignoring time and volume in the process.

A number of vertical lines are connected in a series with short horizontal lines (also called shoulders when a rising vertical line connects to a vertical falling line). The horizontal lines are called waists when a vertical falling line connects to a vertical rising line.

To signal bullish or bearish trends, the lines change thickness or colour. A thick (or green) line is formed when the price increases above a previous high, known as Yang line. A thin (or red) line is formed when the price falls below a previous low, known as Yin line.

The charts are bult using uniformed sized bricks, as the name “Renko” from the Japanese word renga, means “bricks”.

A “brick size” is specified by the trader (by dollar value, number of pips, or average true range), which is the amount the price must move, before a new brick is added.

The new bricks, are placed at a 45-degree angle (up or down), adjacent and to the right of the previous brick.

When the price moves twice the “brick size”, the chart reverses and starts adding bricks in the opposite direction.

This chart resembles the candlestick chart type, with the difference that it averages all data points to smooth out price action and reduce the noise.

It’s a preferred choice by many professional traders, because it makes it easier to identify trends in comparison to traditional chart systems. Heikin Ashi means average bar, and it is used by traders to see the trend and general direction of the market, to signal reversals in trends, and support any trend strategy that makes sense.