Why charts use candles

Summary

A line chart joins one price per period, usually the close. A candle keeps four: where the period opened, the highest and lowest prices reached, and where it closed. That extra detail shows how the fight between buyers and sellers went inside the period, not just where it ended. This is why traders on almost every live stream read candlestick charts.

Key points

• A candle shows four prices: open, high, low and close.
• A line chart only joins the closing prices.
• Candles show the path inside a period, not just the result.

Check yourself

Which four prices does one candle show?

Practice