PrintThere are several types of charting methods, but three of them are the most popular.
1) “Bar Chart” – a vertical line is shown for each time increment selected. In the chart below, a “daily” chart is used to show the September NYMEX contract for natural gas. Each bar shows the price results for that day’s trading. The mark to the left of the bar represents the first trade of the day, or the “Open.” This is the price of the first trade that occurs right after the bell rings to start trading. The vertical line itself represents the full range of prices for the day, that is, the High and Low prices. And the mark to the right of the bar represents the final closing, or “Settlement” price for the day.This is often referred to as the "OHLC" chart (Open/High/Low/Close).
2) “Close Only” – this type of chart shows only the daily market settlement price. It provides much less information than the Bar Chart and is mainly used for longer-term trend analysis. The chart below shows the same September natural gas contract in this form.
3) “Candlestick” – these charts were developed by the Japanese centuries ago. They provide information similar to the Bar Chart but also indicate “up and down” days. That is, they clearly show the direction the market took on a daily basis. The top end of the “candle” still represents the High for the day, and the lower end represents the “Low,” but the “body” indicates the Open and Closing prices in relation to one another. For example, if the Open is higher than the Close, the Open price is at the top of the “body” of the candle and represents a day where prices fell (solid "body"). Conversely, if the Close is found on the top of the “body,” it represents an “up” day, and on the chart below, appears with a hollow “body.” As you can now see, the up-and-down days are easily visible on the Candlestick Chart. By counting these, we can determine the current uptrend. For Traders, the question is, when will it reverse course?
