Welcome back everyone., There are four different types of charting methods you can use. Today, I'm gon na break them down talk about the pros and cons of each and the number one chart type. I think you should be using., Hey everyone be sure to like share subscribe, ring that bell to be notified. As soon as we drop a new video., I mention it all the time, but we do so much on the channel..

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All right., The four main types of charts, we're gon na break down.. You can start with line charts. And I think line charts are great if you've got a very longterm kind of timeframe., I mean, if you're investing for years. I think line charts are valuable., They can show a trend., You can see the stock BFRI is gon na, be the one I use as an example..

You can see it recently started trading.. You can see. It recently had a big spike. A couple of weeks ago.

Pulled back and is now trending up and getting ready to break over that high.. But all you see with line charts are the day open and the day close.. So you can see the high. You can see the low, but you don't see intraday, which is very important for day trading and much less important.

If you're longer term., I mean listen. If you're long-term investing, it can quite frequently just the noise to know the high of the day and the low of the day. Because if your trend following big fan of trend following check out Michael Covel, he's a friend of mine, got some great books. But if you're trend following you're actually looking for - and this may sound weird less information.

- You don't necessarily care about crazy spikes because of a news announcement or an earnings, announcement. You're, trying to follow that line. Charts, I think, are the great way to do. That., A lot of the charts I'm gon na talk about next are more intraday.

And give you a lot more information that you can interpret as a day trade, but longterm investing. I think they can get a little noisy and offer too much information.. So that being said, line charts, in my opinion, only good for investing not a day trade charting, not even a swing trade in charting.. But if you're looking to hold in your IRA make those type of trades, I think they can be useful.

And really that's the only use for them.. Beyond that, once you're going into shorter timeframes, you need to look at intraday charts., So the next one I'm gon na talk about are bar charts and bar charts. I do think are awesome.. I don't necessarily use them myself, because I'm going to finish on candles..

Most of you, guys and gals are probably here to talk. Japanese candlesticks.. You probably knew this., I'm gon na finish with Japanese candlesticks, because they're my favorites but bar charts very similar, just a different method.. So you can see you see the high of the day.

The open., I'm sorry, the open of the day is on the left.. The close is on right.. You can see where the stock opened, where it closed.. You can see the high of the day..

You can see low of the day., So this big candle you can see on this big gap. Up stock, gapped up to 606 went as high as 750 and then it closed down at 550. And the low of the day was 460 479.. So you can see how, with the bar chart versus the line, chart lot more information.

And ultimately notice how, with that line chart in my opinion, you can see the trend a little better.. Now I get it, you can probably kind of tell higher highs higher lows in that trend, but way clearer on the line chart when you're talking trend following.. But the bar charts give you that open that close the daily range and then you can see if it's red the stock closed lower than it opened.. If it's a green bar the stock closed higher than it opened., So you can see all of that information there.

Once you learn these pattern or not these patterns, these charting methods, you can see how you can quickly read all of that information in a matter of Seconds., What you know what the red means, what the left bar means, what the right bar means et cetera., The last or third to last - is Heikin-Ashi., So these are a different, slightly different from Japanese candlesticks.. It's just a different visualization method.. Ultimately, you still see the high, you still see the close., You still see the wicks., You got solid bodies and hollow bodies, but I don't like them.. This is my even out of all my charting or out of all the charting possibilities.

Heikin-Ashi are my least favorite. And again it's just a personal taste in my opinion'cause. They give you the same information that the bar chart does. And then I'm gon na finish with the Japanese candlesticks, but it's just a different look and feel..

It's kind of like I like red cars and you like blue cars., So you get the high. You get the low open body hollow body, but I just don't like the looks.. Let's finish on my favorite and I think the best. And pretty much every one of these when you're talking day trading, only a small subset use, bar charts or use Heikin-Ashi.

And there's other charting methods out there that are even more obscure.. There's point and figure I mean there's a lot of point and figure. And if you wan na go old school check those out but there's a lot of different methodologies. But there's very few things day.

Traders agree on short-term traders agree on, but 99 % of people think you should be using Japanese candlesticks. And it's just the best method., It's just the clearest looking. And especially if you're learning, if you're watching webinars if you're getting books, if you're jumping on YouTube, you're Gon na find again, 99 % of people use Japanese candlesticks.. I think you should be using the same charting that you're learning from.

You'll see me always.. So let's break down the candles.. So when you've got a red candle, it's gon na be different than when you've got a green candle.. So, let's start with this same candle, I keep going over or the same day I keep mentioning..

So you can see it's a red candle.. So when you've got a red candle, you know that the top of the body is the open price.. So the 930 open is the top of the body. So again opened at six and then the bottom of the body on a red candle would be the 4:00 PM close..

Then the top wick would be the highest point. The stock went on the day and then the bottom wick of the candle would be the lowest point of the day., Then next day, the green candle.. So if it's a green candle, you know that this stock gapped up to seven and then closed at 790.. Now, how do you know that? Because it's a green candle., If it's a green candle, you know the bottom of the body is the open and the top is the close.? Then wicks are the same.

Wicks show you the intraday high, as well as the intraday low.. Now that being said, let's jump over to the intraday and I can show you the same type ideas.. So, depending on the timeframe, I like five minute candles intraday.. You can see the same thing.

So whether we're talking daily or one minute or five minute or one hour, every candle represents the open of that timeframe, the close of the timeframe and then the high of the low intermediary of that particular time period. Five minutes in this case., So you can see the stock like at. Let's look at this 10:15 candle., So you can see it. Gapped up at 10:15 AM to $ 7..

It ran as high as 730. Then that candle closed at 727. Next candle, another green candle got a little wicky there. Look at that big pull back to VWAP..

Actually, let's look at the one minute candle to see that.. So when you see that big pullback and then reclaims VWAP and then you can see the trend continuing higher., So now we're looking at a one minute again, red candles mean it closed lower than it opened. Green candles mean it closed higher than it opened. And then the last thing - and this applies for all the charting platforms - is the volume candles., And this is something I get asked about.

A lot.. A lot of people ask ``. Well, why are some volume candles, green and some volume candles red ?'', Great question., Very often misunderstood. - Understand that the volume candle I mean this is just a bar chart at the end of the day, that's showing you how many shares traded in that time, period.

So That 10:15 candle traded 400,000 shares 395,000. And it's green because the price candle was green., So the volume candles it doesn't mean higher volume or lower volume.. You got ta. Do that mentally.! You can see the next candles..

Let me jump over to a five minutes. Make it a little clearer.? You can see that then that next candle was lower volume, but a green candle.. The reason it's green is notice the price action candles. So that trips up a lot of people.

They're like ``. Well wait a minute.. The volume was lower from 10:15 to 10:25. Why's, the candle go from red to green ?''.

It matches up with your price action candles.. So all right drop me a comment., I'm guessing 99 % of you use Japanese candlesticks.. If you don't definitely check them out. And then I think, probably 1 % of you use bars..

If I had to like, if you forced me to change to a different charting methodology, I would go to bar charts.. I do like them., I just don't like them. As much as Japanese candlesticks. So drop me, a drop me, a candle drop me a candle., Hey it's the Christmas season., Maybe head on down to Yankee Candle and send me a candle too..

So, anyway, drop me a comment as to what charting platform you prefer. And as always check out the SteadyTrade team. Would love to work with you.