Line Charts
Plotting a line between the closing prices for each of the chart’s periods yields a line chart. A line connecting the daily closing prices is displayed on a daily chart. To visualize the direction of pricing, line charts are helpful. It’s also easy to determine the size of rallies and trend reactions.
Line chart showing higher highs and lower lows
A five-month cost The Apple, Inc. (AAPL) SharpChart is displayed above in a line format. Green dashes indicate higher highs and lows, while red dashes indicate lower highs and lows. With increasing highs and lows between March and mid-May 2008, the price trend is clearly seen. Prices started to reach lower highs and lows after the middle of May 2008.
When a symbol only has end-of-day (close) prices available, a line chart is automatically drawn. All mutual funds and certain market indices are examples of such symbols. Nonetheless, ticker symbols that only have end-of-day (EOD) quotations can have weekly and monthly price bars plotted.
OHLC Charts
Open-High-Low-Close (OHLC) bar charts provide volatility information that line charts lack. The attributes of an OHLC bar are shown below. The chartist can evaluate volatility by the height of the bars and the conviction of the buyers and sellers by the price range between the open and close marks.
Illustration of an Open-High-Low-Close (OHLC) chart
When the CLOSE point for the left price bar is above the OPEN mark, it means that the price ended the day higher, which is referred to as an up day. It is thought that this price bar is bullish. When prices rise and eagerness for profit outweighs fear of loss, bullish emotion is evident.
A down day occurs when the price ends lower for the day, as indicated by the price bar on the right, where the OPEN is higher than the CLOSE. This price bar is bearish. When prices decline and fear of loss outweighs hunger for gain, bearish mood is evident.
SharpChart of AAPL illustrating the OHLC format
The SharpChart of AAPL above illustrates the OHLC format.
ExamplesObserve how intraday price fluctuations cross the red and green reference points created at the previous line chart’s closing price levels. This demonstrates the value of line charts in displaying the direction of prices.
OHLC Bar Colors
An illustration of an OHLC chart’s bar colors
Depending on how a price bar’s closing price compares to the closing price of the day before, the price bars will be either red or black when the Chart Attributes workbench’s ‘Color Prices’ option is selected. The price bar will be black if the closing price is higher than the closing price from the day before. The price bar will be red if the closing price is less than the price from the day before. It is feasible to have a black price bar with a close that is lower than the open using this technique.
Example of colored OHLC price bars are shown in the AAPL SharpChart
The AAPL SharpChart above displays colored OHLC price bars. As was previously said, the price bar’s hue is solely determined by the closing price of the day prior, not the opening price of the current day. The price bars for up and down days are typically red and black, respectively, however the preceding chart illustrates that this isn’t always the case.
