Line charts are the most basic chart and show the least amount of data. A continual line connects all of the closing prices together for a stock. See the example below.

The bar chart tells a bit more. Many times it will show the opening, high, low and close of the day on the chart. This shows much more because many times it’s important to know if a stock opened high but closed low (this is generally considered bad). The opposite would also be true. A stock opening lower, yet closing higher is generally a good sign. The bar chart will show this much easier than looking at a lot of quotes over time. The chart is the graphical representation of the quotes and allows you to take in so much more data in a short amount of time and realize whether that data is going up overall or going down overall.

Lastly, we have the candle chart. This is the most widely used type of chart because not only does it do everything that the bar chart can do but it’s more visual with green or blue candles representing up days and red candles representing down days. This can be seen at a glance this way. Also there are many patterns that we’ll be discussing later on that can be seen on a candle chart that cannot be seen on a bar or line chart. These patterns can allude to the future price action to come when properly spotted. The Japanese have been using candlestick charts long before they were popularized in America.