Most beginners only ever see candlestick charts. But the same prices can be drawn in very different ways, and each way highlights something and hides something else. Knowing the main chart types helps you pick the right view for the question you are asking, and stops you being fooled by a chart that looks smoother than the market really is.
In short
- Candlesticks and OHLC bars show every period's open, high, low and close. Start here.
- Line and area charts show only closes: clean, good for the big picture, but they hide intraday swings.
- Heikin Ashi averages candles to smooth trends. Easier to read, but its prices are not real traded prices.
- Renko and line break ignore time and only draw new bricks or lines when price moves enough. Great for trends, poor for timing.
- When you place an order, always check the real price on a standard candle chart.
Candlesticks and hollow candles
A candlestick shows open, high, low and close for each period, coloured by direction. It is the default for good reason: it shows everything, and the body and wicks make buying and selling pressure easy to see. Hollow candles are a variation where a candle that closes above its open is drawn hollow (outlined) and one that closes below its open is filled. Some traders like them because they show both the move within the period and the move from the previous close.
Use it for: almost everything, especially learning. Watch out for: noise on very short timeframes.
OHLC bars
An OHLC bar shows the same four prices as a candle, using a vertical line from low to high with a small tick to the left for the open and to the right for the close. It takes less space, so many bars fit on screen, which some people prefer for long histories. The information is identical to candles; it is a matter of taste.
Line, area and baseline charts
A line chart connects closing prices and ignores the open, high and low. That makes it the cleanest way to see the overall trend and to compare stocks. An area chart is a line chart with the space below filled in. A step line moves in flat steps instead of diagonals. A baseline chart colours the line green above a chosen starting price and red below it, so you can see at a glance whether price is above or below where you started watching.
Use it for: the big picture, comparisons, presentations. Watch out for: it hides wicks, so it hides where price was rejected.
Heikin Ashi
Heikin Ashi (Japanese for roughly "average bar") looks like a candlestick chart but each candle is calculated from averages. Its "close" is the average of the period's open, high, low and close; its "open" is the midpoint of the previous Heikin Ashi candle. The result is much smoother: in a trend you get long runs of the same colour, often with no wick on one side, and colour changes tend to come when momentum fades.
Use it for: seeing whether a trend is intact, and staying patient in a trend instead of reacting to every red candle. Watch out for: the prices on a Heikin Ashi candle are not real traded prices. The open and close you see may never have actually traded. Never place a stop-loss or judge your fill from a Heikin Ashi chart; switch back to candles. It also lags, because it is built from averages.
Renko
A Renko chart ignores time completely. You choose a brick size, say Rs 10. A new brick is drawn only when price moves a full Rs 10 beyond the last brick: a green brick up or a red brick down. If price wanders inside that Rs 10 range for a week, nothing new appears. Bricks sit at 45-degree angles, so trends look like clean staircases.
Use it for: filtering out small noise, and seeing clean support and resistance. Watch out for: the brick size changes everything; the chart hides how long moves took; and a sharp spike that reverses inside one brick may not show at all. Volume and most time-based indicators do not line up with bricks the way they do with candles.
Line break (three-line break)
A line break chart also ignores time. Each new "line" (a box) is drawn only when the close goes beyond the previous line's high or low. To change colour, price must break past the extreme of the last few lines, three in the common version. Small pullbacks are ignored, so reversals show up only after a meaningful move against the trend.
Use it for: confirming whether a trend has really reversed. Watch out for: by design it reacts late, and like Renko it says nothing about how long anything took.
Which chart type should a beginner use?
- Learn on candlesticks. They show everything, and every other type is easier once you understand them.
- Use a line chart when you want the big picture or to compare two stocks.
- Try Heikin Ashi or Renko as a second view to check the trend, not as your only view.
- Go back to candles before acting on anything, because only they show real traded prices.
The StockYatra charts page has all of these: candles, hollow candles, OHLC bars, Heikin Ashi, Renko, line break, line, step, area and baseline, switchable from the chart-type menu on the same stock. Flip one stock through every type, then press Replay and step forward to see how each one reacts to the same move; Renko and line break will sometimes sit still for many candles. If any term here is new, check the glossary or the learn hub.
Key takeaways
- Candles and bars show real open, high, low and close; learn on them first.
- Line charts simplify by dropping wicks; good for trends and comparisons.
- Heikin Ashi smooths trends but its prices are averages, not real trades.
- Renko and line break ignore time and filter noise, at the cost of lag and lost detail.
Education only, not investment advice. StockYatra is a learning app: prices on its practice market are simulated around each stock's real-world price level, coins are virtual, and nothing in this article is a recommendation to buy or sell any security. Every example uses made-up round numbers to explain an idea, not to describe a real stock.
Summary in Nepali (नेपालीमा सारांश)
एउटै मूल्यलाई धेरै तरिकाले देखाउन सकिन्छ। क्यान्डलस्टिक र OHLC बारले हरेक अवधिको खुल्ने, उच्च, न्यून र बन्द मूल्य देखाउँछन्, त्यसैले सिक्न यहीँबाट सुरु गर्नुहोस्। लाइन चार्टले बन्द मूल्य मात्र देखाउँछ, ठूलो ट्रेन्ड हेर्न सजिलो तर विक लुकाउँछ। हाइकिन आशीले औसत प्रयोग गरेर ट्रेन्डलाई चिल्लो बनाउँछ, तर त्यसका मूल्य वास्तविक कारोबार भएका मूल्य होइनन्। रेन्को र लाइन ब्रेकले समयलाई बेवास्ता गर्छन् र मूल्य पर्याप्त सरेपछि मात्र नयाँ ब्रिक वा लाइन बनाउँछन्। कुनै निर्णय गर्नुअघि सधैं सामान्य क्यान्डल चार्टमा फर्केर हेर्नुहोस्। यो शिक्षाका लागि मात्र हो, लगानी सल्लाह होइन।
Practise on a real chart, free
Open the free StockYatra charts in your browser, no sign-up needed, or download StockYatra on iPhone or Android and start with 10,000 free virtual coins. Prices are simulated and coins are virtual, so no real money is ever at risk.
