OHLC Charts – An Example

With extensive experience as an electrical/software/coding engineer along with having a diverse financial background, Thomas Wettermann’s areas of interest include Machine Learning (ML), artificial intelligence (AI), and Financial Technology (FinTech). For the past few years, Thomas Wettermann has focused on the underlying technologies that support and promote all phases of cryptocurrency, Web 3.0, and metaverse ecosystems.

OHLC charts graphically represent price action over a set period of time for assets such as bonds, stocks, commodities, and cryptocurrencies. When combined with other financial tools, these charts are a great way to predict price movements.

A BTC 1-hour OHLC candlestick chart (Source: opensource.com)

What Does OHLC Stand for?

The abbreviation OHLC stands for four criteria of an asset’s price over a specific period of time: • O: open price • H: high price • L: low price • C: close price Prices are determined over a specific period of time, such as a minute, hour, day, or week. Different symbols can be used to represent the four criteria collectively, and these symbols are often plotted into an OHLC chart.

What Does an OHLC Chart Look Like?

An OHLC chart illustrates a number of sequential OHLC symbols that visually represent the open, the high, the low, and the close of an asset during a period of time. A sample OHLC bar chart is illustrated below.

An OHLC bar chart (Source: datavizcatalogue.com)

This chart includes three OHLC symbols plotted along an x and y graph. The y-axis represents a pricing scale of the asset. Here, the pricing scale extends from $0 to $400.

The chart also includes a time scale provided along the x-axis. The time scale is segmented into equal increments. Here, the time scale is segmented into 24-hour periods, or Days 1, 2, and 3.

This bar chart also includes one OHLC symbol for each of the segmented time periods. For example, the first OHLC symbol in the sequence (denoted in red) represents the four OHLC price points for the asset during the first timing segment of the sequence (Day 1). 

In typical OHLC charts, symbols are provided in black. But they may also be colored to visually represent whether the asset’s price went up or down during a particular time frame.

For example, the leftmost OHLC symbol in the chart above is represented in red, which designates a bearish day, when the price of the asset went down. The second OHLC symbol in the sequence is a green symbol, designating a bullish day, where the price of the asset went up.

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