721122, 220 Pa ‘Bar Chart Definton = @ Investopedia Q TECHNICAL ANALYSIS > TECHNICAL ANALYSIS BASIC EDUCATION Bar Chart By CORY MITCHELL Updated May 10, 2021 Reviewed by SOMER ANDERSON, Fact checked by MICHAEL LOGAN What Is a Bar Chart? Bar charts consist of multiple price bars, with each bar illustrating how the price of an asset or security moved over a specified time period. Each bar typically adjusted to show only the high, low, and close (HLC). KEY TAKEAWAYS, * Abar chart visually depicts the open, high, low, and close prices of an asset or security over a specified period of time. The vertical line on a price bar represents the high and low prices for the period. The left and right horizontal lines on each price bar represent the open and closing prices. Bar charts can be colored coded where if the close is above the open it may be colored black or green, and if the close is below the open the bar may be colored red. Understanding Bar Charts Abar charts a collection of price bars, with each bar showing price movements for a given period. Each bar has a vertical line that shows the highest and lowest price reached during the period. The opening price is marked by a small hitps:www.investopedia.comfermsfbbarchart asp wr721122, 220 Pa ‘Bar Chart Definton If the closing price is above the open price, the bar may be colored black or green. Conversely, if the close is below the open, the price dropped during that period, so it could be colored red. Color coding the bars helps traders see trends and price movements more clearly. Color coding is available as an option in most charting platforms. Technical analysts use bar charts—or other chart types such as candlestick or line charts—to monitor price action, which aids in trading decisions. Bar charts allow traders to analyze trends, spot potential trend reversals, and monitor volatility and price movements Traders and investors decide which period they want to analyze. A 1-minute bar chart, which shows a new price bar each minute, would be useful for a day trader but not an investor. A weekly bar chart, which shows a new bar for each week of price movement, may be appropriate for a long-term investor, but not so much for a day trader. Interpreting Bar Charts Because a bar chart shows the open, high, low, and closing prices for each period, there is a lot of information that traders and investors can utilize. Long vertical bars show there was a big price difference between the high and low of the period. That means volatility increased during that period. When a bar has very small vertical bars, it means there was little volatility. If there is a large distance between the open and close it means the price made a significant move. If the close is far above the open, it shows buyers were very active during the period, which may indicate more buying in future periods is forthcoming. If the close is very near the open, it shows there was not a lot of conviction in the price movement during the period. hitps:www.investopedia.comfermsfbbarchart asp 2721122, 220 Pa ‘Bar Chart Definton below the high, it signals that toward the end of the period sellers came in. That is less bullish than if the asset closed near its high for the period. If the bar chart is colored coded based on whether the price rises or falls during the period, the colors can provide information at a glance. An overall uptrend is typically represented by more green/black bars. Downtrends, on the other hand, are typically represented by more red bars. Bar Charts vs. Candlestick Charts Bar charts are very similar to Japanese candlestick charts. The two chart types show the same information but in different ways. Abar chart is composed of a vertical line, with small horizontal lines on the left and right that show the open and close. Candlesticks also have a vertical line showing the high and low of the period (called a shadow or wick), but the difference between the open and close is represented by a thicker portion called a real body. The body is shaded in or colored red if the close is below the open and shaded in or colored white or green if the close is above the open. While the information is the same, the visual look of the two chart types is different. Bar Chart Example The following image is a bar chart for the SPDR S&P 500 (SPY) ETF. During declines, the bars typically get longer, showing an increase in volatility. Declines are also marked by more down (red) price bars compared to up (green) bars. letImage hitps:www.investopedia.comfermsfbbarchart asp a7721122, 220 Pa ‘Bar Chart Definton Image by Sabrina Jiang © Investopedia 2021 As the price rises, there tend to be more green bars than red bars. This helps to visually spot the trend. Even though there are typically red and green bars during an uptrend (or downtrend), one is more dominant. This is how prices move. In order for the price to move higher within an uptrend, the price bars will need to reflect that by moving higher as well, on average. If the price starts moving lower, on average, by creating more red bars, then the price is moving into a pullback ora trend reversal. Investopedia does not provide tax, investment, or financial services and advice. The information is presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Investing involves risk, including the possible loss of principal. A Digital Wallet for All Your Web3 Needs From crypto to NFTs and beyond, accessing a wealth of Defi platforms is simpler than you might think. With OKX, a leading digital asset financial service provider, you can access world-class security as you trade and store assets. You can also connect existing wallets and win up to $10,000 when you complete a deposit of more than $50 through a crypto purchase or top-up within 30 days of registration. Learn more and sign up today. 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Itis a common chart type with several price action strategies based on it. more White Candlestick Definition Awhite candlestick depicts a period where the security's price has closed at a higher level than where it had opened, more Vertical Line Charting Definition and Example Vertical line charting is a type of chart used to plot how the price of a security moves over time. more Red Candlestick Definition and Uses Ared candlestick is a type of price chart indicating that the closing price of a security is lower than both the open and prior close. more What Is a Bar Graph? Abar graph is a chart that compares different categories of data using rectangular bars that represent the value of the data, more Forex Charting Software Forex charting software helps traders analyze foreign currency pairs price trends, enabling them to make informed trading decisions. more hitps:www.investopedia.comfermsfbbarchart asp 57721122, 220 Pa ‘Bar Chart Definton Partner Links Related Articles leUnderstanding a TECHNICAL ANALYSIS. Candlestick Chart | Understanding a Candlestick Chart ADVANCED TECHNICAL ANALYSIS CONCEPTS Heikin-Ashi: A Better Candlestick TECHNICAL ANALYSIS What Is a Candlestick Pattern? TECHNICAL ANALYSIS BASIC EDUCATION Trading Without Market Noise \eiMan DoingHis DAY TRADING Accounting, Trading the Nonfarm Payroll Report Financial Adviser Working hitps:www.investopedia.comfermsfbbarchart.asp or721122, 220 Pa ‘Bar Chart Definton “TRUSTe Osc meredith Investopedia is part of the Dotdash Meredith publishing family. 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