Explaining Bars, Graphic Guide Part 8As one of the most popular types of business charts, a bar chart provides a lot of information to technical analysts. As a result, it enables traders and investors to come up with thoughtful trading strategies, designed to take advantage of the market, allowing traders and investors to profit from different values.
To better understand a bar chart, you must learn its different parts.
High - is at the peak of a single bar. Represents the highest price for the day or time period you are using.
Open - This is the first price a security first trades at and only occurs when the stock market opens for trading. This is represented by a horizontal bar near the foot of the vertical bar.
Low: As the lowest price traded during the day, it is at the foot of the vertical bar.
Close: As the last traded price of the day, it is represented by a horizontal bar that projects towards the ad on the right located near the top / peak. During this time, traders are supposed to exit a trade or complete transactions before the market closes.
Direction: The bar graph indicates the direction and is represented by the opening and closing feet. What you need to know is that if the opening foot is above the closing foot, it indicates upward progress. When the closing foot is below the opening foot, this indicates that the price has moved down.
Range: is represented by the location of the top and bottom of the vertical bar. The Range value is calculated by subtracting the minimum from the maximum.
A bar chart belongs to OHLC charts or Open-High-Low-Close chart types and as such is formed through the connection of a series of price points. As a result, the chart is plotted on the X and Y axes. The X axis represents time which is represented in terms of days, while the Y axis represents price.
Bar Chart (OHLC)
OHLC = Open,High,Low,Close
Well, for simplicity, let's look at an example of the OHLC bar.
Now let's see how this bar is created:
The first thing that forms is the horizontal bar that appears on the left side.
Then a vertical line begins to form that will be in motion for the duration of the time interval that we have chosen. The upper end of the bar will be the maximum price, while the lower end will be the minimum price.
Finally, once the vertical bar is formed, a horizontal line will appear on its right side that will indicate the closing price of the bar.
Let's remember. Always, always, the opening price is on the left, regardless of whether it is above or below the horizontal line on the right.
If the horizontal bar on the left is below the horizontal line on the right, we will say that it is a bullish bar, since the price has closed above the one it opened.
On the contrary, if the bar on the left is above the bar on the right, we will say that it is a bearish bar, since the price closed below the opening price.
Let's better see an example of each one:
The left horizontal line informs us of the opening
The right horizontal bar informs us of the closure
Finally, comment that there are different types of bars and sizes. It is possible that the opening and closing prices are the same, or that the bar has no maximum or no minimum or, absence of both. What we have to be clear about is that it will always have a price that opens and another that closes the bar.
Here are some examples of bars for clarification.
1- Opening and closing at the same level without any movement occurring.
2- Opening and closing at highs
3- Minimum opening and closing
4- The closing coincides with the minimum
5- Opening at the maximum
5- Open coincides with the high and close coincides with the low
6- The open and close coincide, but the bar makes lows and highs
There are more types of bars, for example with the opening at the lows and the closing at the highs, among others.
Finally, although the bar chart provides us with all the price information, it has the disadvantage of not being so visual and can be confusing if we are not used to it.
Bar Features:
It is a unit of measure within different trading platforms. Considering it more or less the size of the predetermined time.
You are looking at a 1d period graph. The Bar will have the value of 1d. Period.
If you see it in graph 1min, the bar will have the value of 1min.
- Bars in 1d time.
- Bars in time 1min.
If we realize Bars does not have "Shadows" they are only lines which already includes the shadow within its line and its crossing to the next Bar would be the closing price.
This would be a way to see at which closing price for more accuracy. In any case, you are not interested in seeing the shadows and only visualizing the movements of the asset's value.
Keep in mind that this is a guide that I am developing from the most basic, until I advance to where I know, if you are interested, follow me.
