Categorized | Stock Trading Analysis

Bar Chart in Stock Trading

Bar chart is one of the chart patterns that technical analysts use in stock and other investment types. In a typical bar chart indicating price movements in the stock market, the top of the chart (for the vertical axis) will show a security’s highest price as traded during the day, while the bottom of the chart indicates the lowest price. The right side of the bar will display the closing price, while the left side of the chart will show the opening price. If it is a single bar, it is indicating one day of trading.

Bar Chart is the most popular chart pattern used in carrying out technical analysis. The visual or graphical representation of price activity within a certain time frame is engaged in spotting trends and patterns.

Stock Trading Bar Chart Culled from Investopedia.Com

The additional major pieces of info inputted to each data point made the bar chart to expand on the line chart. There are series of vertical lines in the chart representing each data point. The vertical line indicates the low and high for the trading period under review, including the price that closes the period. The horizontal dash indicates the close and open on the vertical line. The dash placed on the left side of the vertical line illustrates the opening price. On the other hand, the dash on the right side indicates the close.

Normally, if the open (represented by the left dash) is lower in comparison with the close (represented by the right dash), the shading of the bar will be with black color to indicate an appreciation (up) period for the stock; in essence, the stock has appreciated. Red-colored bar is an indication that the stock’s value has depreciated within the period under review. In this case, the close (represented by the right-side dash) is lower in comparison with the open (represented by the left-side dash).

Be Sociable, Share!

Leave a Reply