Bar ChartsBar charts also called as OHLC charts or open-high-low-close chart are stock charts used in charting and study of chart patterns in technical analysis. Each bar is a symbol created by connecting a series of price points, typically used to illustrate movements in the price of a financial instrument for a time period (i.e., hour, day, week, month, etc.). This is the most commonly used chart.Construction If the high of present bar is higher than previous bar and the low present bar is lower than previous bar, then present bar is termed as an 'outside day'. If the high of present bar is lower than previous bar and the low present bar is higher than previous bar, then present bar is termed as an 'inside day'. Study the bar chart given below and compare it with any other type of chart.
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To draw a bar chart, OHLC that is 'open, high, low and close', stock data is used. Hence the name OHLC chart. A vertical line is drawn from high price point to low price point. A tick mark is placed on left of the line, attached to it, corresponding to the opening price, i.e. starting price (first price) for that time period. Similarly a tick mark is placed on right of the line, attached to it, corresponding to the closing price (last price) for that time period.
If the high and low of a bar is higher than previous bar, then that bar is called an 'up bar' or an 'up day'. If the high and low of a bar is lower than previous bar, then that bar is called an 'down bar' or an 'down day'.
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