Depending on which exchange you use, the main common charts will be one of three. On some exchanges you can choose which one to use. A great site to visit is bitcoinwidom.com which is not an exchange, but pulls the data from exchanges, to enable to get the most out of TA and chart reading.
- Line Chart
- Bar Chart
- Candlestick Chart
A line chart is the simplest form of chart. It is literally a line that is drawn from one closing price to the next closing price. Basically you will be able to see the trend of a coin’s price with a line chart over time. Below is an example of a line chart
An example of a line chart of USD/BTC
A bar chart has a bit more involved. It will show the opening and closing of a coins price, as well as the highs and the lows. Bar Charts are also known as OHLC – open, high, low, close. Below is an example of a Bar Chart;
An example of a bar chart of USD/BTC
As you can see, it is a bit more complex from a line chart. Starting out you will see a horizontal line, which is the opening price of the coin within that timeframe. Next is the vertical line, with the top being the high, and the bottom being the low. Next is the horizontal line, which is the closing price of the coin within that timeframe. To get a closer look at one moment in time, here is an example of price bar;
Open: The little horizontal line on the left is the opening price
High: The top of the vertical line defines the highest price of the time period
Low: The bottom of the vertical line defines the lowest price of the time period
Close: The little horizontal line on the right is the closing price
Candlestick charts are the easiest charts to work with and interpret. They are represented by an open, high, low, close, and depending on whether there are more buyers or sellers, the bars will be green or red. Below is an example of a Candlestick Chart;
An example of a candlestick chart of USD/BTC
Taking a closer look at each candle, I will explain further. With the red candles, this represents a sellers/bear market in that timeframe – there were more sellers than buyers. With green candles, this represents a buyers/bull market in that time frame – there were more buyers than sellers. Each candle has an open and close position as seen below. Red candles opens are on the top, representing a downtrend, and close position at the bottom. Green candles opens are on the bottom, representing an uptrend, and close position at the top. They both have Highs and lows, represented by the thinner bars, and as we progress and talk about Japanese candlesticks, these will be important in understanding the way the market is moving.