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Bar
Charts
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Bar charts are probably
one of the most commonly available charts and can be
found on almost any financial website. The bar chart
is by far the best style of chart to use in
identifying support and resistance levels or some of
the more complex chart patterns. You will notice that
this style of chart displays significantly more data
than a line chart but is slightly less cluttered than
a candlestick chart. Displayed below is a daily bar
chart for Yahoo Inc. (YHOO).
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Chart
Provided By TC-Net
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- You can see that
each period of time being charted is represented
by a vertical line. In this case we are looking at
a daily chart, so each vertical bar on the chart
represents one days worth of data. If we were
looking at an intraday chart of the same security,
each bar would represent whatever time frame we
had the chart set at.
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- Let’s say for
example that we had the frame for the chart set at
10 minutes, then each vertical bar on the chart
would represent 10 minutes and would plot the open,
high, low, and closing price for the security during
that 10 minutes.
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- In
the example shown below you can see a single bar
that has been extracted from the chart.
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A A
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- On this bar you will
notice there is small horizontal line to the
left-hand side, this horizontal line represents
the price at which the security opened for
trading. Next you see the vertical line that represents the overall range of our stock or
commodity for the given time frame, in this
example it would be one day. The top of this line
represents the highest price that the entity
reached for the day while the bottom indicates the
lowest price reached for the day. The horizontal
line that you see to the right of the vertical bar
is the price at which the stock closed for the
day.
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- If this were a bar
from a stock chart, the line to the left would
represent the price at which the security opened
at 9:30 AM Eastern time, the line to the right
would be representative of the price that the
stock was at when the market closed at 4:00PM
Eastern time.
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- In this example you
can see that the closing price was higher than the
opening price meaning that it was a positive day.
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