This is a popular chart type used by technical traders to trade futures contracts. The advantage of a bar chart over aline chart is that it has many more data points. Learn more about it here. It shows you the open, the high, the low and the close in a particular time period that price has made. Each interval in the bar chart is represented using a vertical line. The top of the line shows the high of an interval, the bottom shows you the interval low. In a bar chart, you also see two horizontal lines on each side of the vertical line. A left dash denotes the opening price of the asset and the dash that points toward the right side show the closing price of the asset.
Most of the charting software will color code the bars. The common colors used are green for the bullish bars and red for the bearish bars. The bar is green when the closing price is higher than the opening price. The bar is red when the closing price is lower than the opening price. There is a third color also used to denote the bars where the opening price is the same as the closing price.
The bar chart is used by many technical traders because it plots more price points as compared to the line chart. This lets the technical analysts spot the supply and demand levels on the chart as well set stop loss and the profit prices.
Point and figure chart
Point and figure chart is another technical analysis chart. This, however, finds fewer users today because of computer software that provides the other chart patterns like line, bar, and the candlestick charts. It is, however, important to understand what the point and the figure chart is.
The point and figure chart have been used for long in the financial market. These, however, focus less on the volume and time which makes it different from the other chart types. The basic advantage of using the point and figure chart is that it reduces the noise in the market and lets one focus on the price movement.
The price is plotted in the form of a grid using Xs and O’s. When the price is bullish the price is plotted on the X and when the price is bearish then it is plotted with an O. These Xs and theOsare placed in the boxes on the chart. Each of the value denotes a price scale but these values adjust when the market valuations change.