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Trading 101: Candlesticks charts VS Bar Charts (OHLC) Trading Candlestick charts - YouTube
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Hi Traders, it's Bruce banks here and
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today we're going to go over candlestick
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charts versus open high low close charts
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or bar charts now first I want to say
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the information that these two charting
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styles represents is identical it's just
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delivered you in a slightly different
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manner and the choice is yours but I'm
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going to give you a few in-depth look on
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exactly why people choose often
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candlesticks over bar charts now first
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on the left here we have a candlestick
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chart each bar represents the high and
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the low the open and the clothes and we
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zoom in here we'll look at this green
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bar here so the high made right now we
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are on a 15 minute chart the high that
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it made is represented by the peak of
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the wick and the wick is this bar area
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right here and this very narrow while
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that's why they call them candlesticks
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wick and so that tells you that within
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this 15-minute period the market made it
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up to here and the lower wick here the
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market made it down here in this solid
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area is the difference between the open
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where you can look at the previous bar
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where it closed and the open will be at
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the bottom here and then the final
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clothes at the end of the 15 minutes is
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right here and the next bar opens at
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this previous bars close you can tell if
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it was a positive or negative clothes
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like if the market opened higher than it
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closed or it closed higher than an open
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by the color of the candlestick all the
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colors here are customizable as well
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you'll see people with black and white
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and even blue and red it's a personal
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choice here so you can see a candlestick
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is a negative or its open was higher
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than its closed by the red bar here so
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we look at this red bar and you can see
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that the open here was higher than its
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closed
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that means that this would be a red
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candlestick but within that 15 minutes
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the market did push its way up here and
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push this way all back down here but
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within the 15 minutes by the time that
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ended it decided close right here and
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open the next bar now this is the same
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for bar charts or open high low close
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bring this up and we'll actually look at
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the exact same bar here which was this
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one so instead of the candlesticks wick
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to give you a clear representation of
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exactly where the market traded but
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didn't actually open or close in it just
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fills it with a solid bar and these in
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out points are how you can tell where
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the market opened or and where it closed
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in that particular bar so looking at
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this green bar right here it's open is
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on the left hand side so it opened here
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and within its 15-minute period it made
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it all the way up to here same as the
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candlestick and all the way down to here
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same as the candlestick and it's closed
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was right here now the only difference
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really is the fact that on the
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candlestick charts the parts where the
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market traded but it wasn't part of its
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open or closed are represented by these
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thin lines now you might be asking
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yourself why does it really matter all
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the information is incredibly relevant
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now the only difference is the fact that
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some traders don't consider where the
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market possibly traded but didn't end up
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opening or closing as important it's all
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important you want that information on
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your charts that's why we choose
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candlesticks and bar charts we don't
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want to hide any of that information but
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with the bar charts it almost it doesn't
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actually weigh it but visually it almost
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ways wherever the market traded in that
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15-minute period in all of these bars as
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visually quite similar whereas candles
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represent that information a little bit
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clearer and one of the key times that
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traders will pay attention to this is
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during the daily tracks and we'll pull
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those up right now
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now you can see we have the same time
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period pulled up on both the daily
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candlesticks and daily bar charts and
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the bar charts end up being a little bit
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more messy and it's hard to see exactly
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what happened during certain periods
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will highlight this area right here on
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both the daily chart shirts for the
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candlesticks and the daily charts for
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the bar charts right here and it looks a
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lot Messier I find on the bar charts in
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the candlesticks because we look over at
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the candlestick side on the left we can
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see that the market was actually quite
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flat and it's opening closed during this
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period the market did push up with quite
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long wicks but it didn't end up managing
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to close their the Wolves ooh miss out
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even a bit further see if we can't get a
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good representation now one thing that
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traders look at especially in the daily
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timeframes is exactly where the market
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opened and or closed not so much if the
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mark was able to be pushed down in that
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actual intraday period especially when
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you're drawing trend lines going to draw
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a trend line of both these charts now if
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you draw from the absolute bottoms of
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the market made you know as low as a
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market push down intraday it gives you
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one particular trend line whereas a lot
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of traders put a lot more weight and I
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particularly do on the actual clothes of
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the market like how far was the market
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able to be pushed down but then actually
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able to close at that level so when i'm
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going to draw a trend line i'm not gonna
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pay as much attention to how far the
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mark was pushed down i'm going to pay
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attention to the meat of the trade and
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that's basically where the market was
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actually able to close at and when i
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draw my trend line I'm not looking at
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these wicks on the candlesticks I'm
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looking at exactly where the mark
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closed and that gives you a bit of an
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interesting representation on this
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example you know we drew the trend line
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on the left-hand side with the
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candlesticks just where the market ended
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up pushing its way down to we had a
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trend line with 22 points and no others
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and it's still a good trend line it
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quite similar to the trend line the next
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trend line that we drew but if we look
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at the trend line where we're
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specifically looking at where the market
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closed and that's where drawing our
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trend line we see we actually get a
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trend line that touches at three points
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now the market pushed down a bit past
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this you know you can't use this trend
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line it's not a guaranteed this trend
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line isn't a representation of exactly
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where the mark is going to bounce off of
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it's a representation of the expect the
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expectations of the traders on the
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upward or downward momentum in the
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market so if we look over and we try and
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draw these exact same trend lines on the
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bar chart it's not saying that we can't
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do it but it's a lot harder to identify
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exactly where the opens and clothes are
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on a brief overview of the mark and a
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brief quick look and if you're trading
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more than one market you really want to
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make your training experience as
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streamlined as fast as possible so we
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can draw these exact same trend lines
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but to actually pick the specific points
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in the market where the market opening
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closed it requires a little bit more
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time and effort to identify them now
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this is all because like I said in the
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beginning of the video the information
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that these two chart styles represents
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is identical opens highs lows and closes
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it's just the candlesticks and this is
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one of the reasons why they're more
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popular represent that data in a
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slightly cleaner manner I hope this
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clarified up the difference between bar
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charts and candlestick charts and I look
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forward to seeing you into the next
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video this is Bruce banks saying enjoy trading
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