Technical Analysis Charting

Stock Market For Beginners:
Technical Analysis Charting: Bar Charts.

Bar charts simply represent the open, the close the high and the low of a stock’s price. Bars on a trading chart are represented by vertical lines that show the difference in price action that occurred within a specific time frame.

While bar charts have been the industry standard, the popularity of this type of charting method has waned while Japanese candlestick charts have increased in popularity.

Stock Market For Beginners School is dedicated to teaching a simple yet effective method of understanding the stock market.

And as we continue to do this, we have provided an example of how to understand technical analysis charting using an illustration of a bar that has traded from open to close.

In this example, ABC stock opened at $15:05

ABC stock proceeded to trade down to a price level of $14.97. In stock market terminology this small drop in price can be referred to as a jig.

ABC stock then commenced its move higher and traded to the high of the day, which was $15.75.

Profit taking occurrs as traders eased their way out of the stock and the stock experienced another slight slip in price and closed at $15.45.

Using the example above a trader could have made a profit of $0.30-$0.60 depending where the trader entered their trade and exited their trade..

This is the clearest example of a bullish bar in a stock.

The same example can be used if a stock is trading in the opposite direction.

If market traders are short the stock, then you would assume that the stock opened at $15.45, experienced a jig, trading up to $15.75 which would be considered the high and then proceed to trade down to $14.97, which would be a $0.30-$0.60 gain in the direction of the stock trend.

Below is an illustration of how the stock traded in the short direction.

Stock Market for Beginners : Stock Market Tutorial

How to Invest in Stocks : Daily Tips and Learning

Bars are formed every 1,2,5,15,60 minutes. Whatever stock market time frame you look at, whether be it a 5minute chart or a 15 minute chart, each bar that is formed in that time frame will take exactly 5 minutes or 15 minutes or 60 minutes. Understanding how bars are formed in vital. Read Stock Market Time Frames to better understand how bars and candles are formed.