Understanding Bar charts
Bar charts are one of the most used chart types, along with line and candlestick charts. They are widely used in the industry due to their simplicity and clarity. Bar charts provide traders with a clear visualization of the open, close, high, and low prices over a specified timeframe, helping them easily identify these key level.
CONTENTS:
What is a bar chart
Each bar consists of a vertical line, commonly referred to as the range: it represents the price range of an asset, with the top indicating the highest price at which a trade occurred and the bottom showing the lowest price.
The horizontal lines to the left and right of the vertical line represent the open and close prices, respectively. These are usually determined through auctions, which are commonly used by major exchanges.
Bars are usually colored to provide an extra layer of information: green bars denote upward movements, and red ones are for downward directions.
Bars vs candles
Along with candlesticks, bars are one of the basic chart types many traders use. And while both chart types display similar price information, each of them has its own benefits and limitations.
Bars
- Bars are similar to candlesticks in that they both display open, high, low, and close prices. However, bars can be configured to display only HLC and exclude open price as some traders consider it less important
- Bars take up less space on the chart and can be more suitable to use with overlay indicators and drawing tools
- Due to their structure — with bodies that include high and low prices — bars charts may appear more suitable for trades focused more on price extremes than on open and close prices
Candles
- Very intuitive and visually engaging in displaying each price level — open, high, low, and close prices. In contrast to bars, their bodies include open and close prices, thus, they may not suit strategies utilizing sharp price swings
- Candles — especially due to many candlestick patterns — can be a bit complex for beginners
- Candlesticks take more time to learn. As technical analysts use chart patterns, drawings, and indicators, they may sometimes contradict each other. All these tools may create more uncertainty and detract from clarity and precision
Enabling the chart type
Once you are on the Supercharts, open the chart type menu on the upper toolbar and select "Bars."
Settings
To make the most of the bar chart, you can customize it according to your preferences and needs. For that, find the gear "Settings" button on the upper toolbar and go to the "Symbol" tab.
The first section, "Bars," lists settings specific to this chart type:
- Color bars based on previous close: With this setting on, the color of each bar will be determined by whether its close price is higher (green) or lower (red) than the close price of the previous bar, rather than by the bar's own open and close prices
- HLC bars: This option disables the open price "foot," so only high, low, and close prices are shown
- Up color / Down color: Colors of up and down bars can be set according to your preferences. The default color scheme is green for upward movement (indicating that the close price of the current bar is higher than its open price) and red for downward movement (indicating that the close price is lower than the open price)
- Thin bars: Allows you to adjust the thickness of the bars for better visibility
Bar charts in a nutshell
Bars are both simple and comprehensive. They are one of the most usable chart types. They represent high, low, close, and open prices of the asset, and work with both chart and candlestick patterns.
They suit any trader — from novice to seasoned, and continue to evolve as new trading ideas emerge.
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