Choosing the Right Chart Type (Candlestick, Line, Heikin-Ashi)

When you open a chart on TradingView, you’ll notice there are different ways to display price data. These are called chart types, and choosing the right one helps you make better trading or investing decisions.

There are many chart types on TradingView, but three of them are used most often:

• Line Chart
  
• Candlestick Chart
  
• Heikin-Ashi Chart
  

Let’s understand what each one means and when to use them.

Line Chart – Simple and Clean

A line chart connects the closing prices of a stock or index over time using a single line.

Think of it like tracking your monthly expenses on a graph. If you just care about the final total each month, a line chart works well.

Example:

Suppose you're a long-term investor checking how Infosys has performed over the last 5 years. You just want to know whether the stock has gone up or down overall. A line chart gives you that answer quickly, without the clutter of daily ups and downs.

Key Points:

• Shows only closing prices
• Easy to read
• Best for long-term views or beginners
• Doesn’t show daily highs/lows or opening prices

Candlestick Chart – Full Picture

Candlestick charts give more information. Each “candle” shows the open, high, low, and close (OHLC) for a particular time period.

Let’s say you’re watching Reliance’s intraday movement. A candlestick chart shows how high the price went, how low it dipped, where it started, and where it ended — all in one candle.

This is the most commonly used chart for active traders.

Key Points:

• Shows open, high, low, and close
• Useful for spotting market patterns and trends
• Helps understand buying/selling pressure
• Can look complex at first but becomes easy with practice

Heikin-Ashi Chart – Smoother Trends

Heikin-Ashi is a type of chart that modifies the usual candlestick calculation. It uses averages to make the chart smoother.

If a regular candlestick chart is like real-time traffic updates, Heikin-Ashi is like looking at average traffic patterns over the week. It filters out small bumps and shows the bigger picture.

Key Points:

• Uses average prices to smooth out the chart.
  
• Good for identifying strong trends.
  
• Doesn’t show exact prices, especially closing price.
  
• May lag slightly behind actual price movement.
  

Quick Comparison Table

Which One Should You Use?

It depends on what you’re trying to do.

• If you want a quick overview of how a stock has moved over months or years, line charts are enough.
• If you want to trade and need detailed price action, go with candlestick charts.
• If you’re following a trend and want to reduce market noise, Heikin-Ashi may help.

You can switch between these chart types anytime on TradingView using the toolbar at the top of the chart. Try them out and see which one makes the most sense for your trading or investing style.