FX · Reading the FX market · lesson 2 of 9 · 5 min read · David Alexander
Candles, bars and lines
Chart types
Candles, bars and lines are three drawings of the same four numbers per period: the open, high, low and close. A line joins closes and discards the rest; bars and candles draw all four, with a candle filling the open-to-close range as a body and leaving the extremes as wicks. Switching chart type changes what is emphasised, never what happened.
Every charting platform offers a dozen ways to draw a price, and the choice feels more important than it is. Underneath the candles, the bars and the line sits the same record from the last lesson - one broker's quotes - summarised into four numbers per period. Learn the four numbers and every chart type becomes legible at once.
What are the four numbers?
For each period - an hour, a day, whatever the timeframe sets - the platform keeps the first quote (open), the highest (high), the lowest (low) and the last (close). OHLC. A line chart joins the closes and throws the other three away, which is why it looks calm: it deletes every extreme. A bar draws all four as ticks on a vertical range. A candle draws the same four with the open-to-close span filled in as a body - coloured by whether the close sat above or below the open - and the stretches beyond it left as thin wicks.
Candles dominate because the body-and-wick drawing makes the four numbers readable at a glance, and this platform's diagrams use them throughout. But dominance is convention, not information: nothing a candle shows is absent from a bar, and nothing either shows changes the prices behind them. The worked example makes the point with money.
Worked example
figures in USDYou hold 0.2 lots of EUR/USD through an hour with a 42-pip range. A pip on a full lot is worth $10.
- An hour of EUR/USD prints an open of note, a high, a low and a close - a 42-pip range from low to high. Draw it as a candle, a bar or a line: the range is the same 42 pips.
- Price it at your size: with $10 per pip on a full lot, your 0.2 lots position is worth $2 a pip - so that hour spanned $84 of movement for you, whichever drawing you looked at.
- Only the line chart hides part of it: joining closes, it shows none of the intra-period travel. The money moved anyway - a rendering can only choose what to leave out of the picture, never out of your account.
What this means for you
Pick candles and stop thinking about it - they carry all four numbers and the whole platform speaks them. Use a line chart for what deletion is good at: seeing the broad path without the noise of extremes, knowing that is a choice to look away from the wicks, not evidence they were quiet. And keep the hierarchy straight: the data is the record, OHLC is the summary, the chart type is the typeface. The next lesson turns to the other axis of the same summary - how much time each candle swallows.
Try it yourself
Pip value calculator
What one pip is worth to you, in your currency, for your size - JPY pairs and metals included.
Check your understanding
Question 1 of 4
What information does a candle contain that a bar does not?