Charting
2 types of charts are commonly used in this market:
- Bar Chart
A single bar on a bar chart consists of the high and the low for the period it is being plotted, with a left vertical tick representing the opening price and a right vertical tick representing the closing price. The time period can be monthly, weekly, daily or even intraday like 5 minutes or hourly.
Candlestick Chart
Candlestick charts are similar to bar charts, with each ‘candle’ representing the time period’s open, high, low and close. However, candlestick charts have a body, giving it a 3-D effect. The body is the range between the opening and closing prices. If the closing is lower than the opening, the candle has a shaded body (coloured red, as above). If the closing is higher than the opening, the candle will have a white body. Like candles and their wicks, the period’s high and low forms upper shadows and lower shadows.
