It may help to occasionally change time frames and consider the price action from a variety of contexts. We have a basic stock trading course, swing trading course, 2 day trading courses, 2 options courses, 2 candlesticks courses, and broker courses to help you get started. Nearly all charting software features the option of candlestick charts. And most provide real-time streaming data for using trading charts live. 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.

Start using various strategies with bars!

Some of them are that it is relatively easy to use, it shows the most important levels (OHLC), and it shows clearly the direction of the financial asset. Bar charts consist of an opening foot—facing left—a vertical line, and a closing foot—facing right. Each bar includes the open, high, low, and close price that occurred during a specific interval, set by the trader.

Time Frames Professional Traders Use

You’ll see how other members are doing it, share charts, share ideas and gain knowledge. Once you register and log in to your account on the Binolla platform, you will see a candlestick chart, which is set by default. To switch to the bar chart, you need to click the icon with charts at the top of the platform and select bars there. Bar charts are the second most popular types of charts in the market after candlesticks. They are available in all trading platforms and show more details than the popular line and area charts. For most traders, we recommend that you use candlesticks in trading.

Even if you day trade, you still want to keep up with the longer-term trends and understand how to read stock charts for day trading. Although not commonly used, monthly charts provide data for years or decades. Likewise, weekly charts offer longer-term data analysis, usually for over six months.

Inside the bar is a situation where the initial green bar is long and is followed by a small bar. In this chart, we see that the 25-day and 50-day Exponential Moving Averages (EMA) made a bullish crossover, pointing to more upside. Similarly, you can use these indicators to trade reversals. They sometimes make it challenging to see exact values without reference lines, and they don’t show the path taken between open and close—just the result. The direction the price has moved during the bar is indicated by the locations of the opening and closing feet. If the closing foot is above the opening foot, then the price made upward progress during the bar.

• One of the approaches for using bar charts is to trade trends and reversals.
• And even if you’ll end up using candlestick charts to analyze the markets, you must know how to read bar stock charts as many news sites often use this chart type.
• A bar chart is designed to provide traders with important information about the current price.
• This pattern is similar to that known as the bullish engulfing in the Japanese candlestick analysis.

Line Charts

Feel free to ask questions of other members of our trading community. We realize that everyone was once a new trader and needs help along the way on their trading journey and that’s what we’re here for. The Bullish Bears trade alerts include both day trade and swing trade alert signals. These are stocks that we post daily in our Discord for our community members.

Is Bar Chart Analysis Reliable?

So which of the following charts uses horizontal bars to display data? That would be category comparison charts, not stock trading charts. Bar charts also show the direction of movement—upward or downward—in the price, as well as how far the price moved during the bar.

One of the approaches for using bar charts is to trade trends and reversals. A trend is a situation where an asset is either in an uptrend or a downtrend. In most cases, a trend is the best way to trade by either buying low and selling high or shorting high and exiting low. While matching bar charts to data tables is important, what you do with that information matters more.

• The bullish outside bar is formed when the price is at the bottom of the chart at the support level.
• Additionally, some companies, like TradingView, offer free online trading charts.
• You’ll see how other members are doing it, share charts, share ideas and gain knowledge.
• Horizontal lines are designed to show open and close prices.

All trading platforms like TradingView and MetaTrader have tools that help you customize the appearance of the chart. For example, if you are a scalper, you should use a bar chart with less than 15 minutes. That’s because you simply want to buy and sell an asset within a few minutes. The low is the lowest price the stock traded during the chosen period and is indicated by the bottom of the vertical bar. The bars are colored green if the closing price is above the open price, which means the price increased in value during that period.

The following price data is commonly displayed on charts, with each bar or candlestick representing your selected time interval. Once you recognize the patterns, candlestick chart analysis indicates trends of optimism or panic selling. 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.

Yes, we work hard every day to teach day trading, swing trading, options futures, scalping, and all that fun trading stuff. But we also like to teach you what’s beneath the Foundation of the stock market. The opposite situation is when the price is below the Keltner Channel indicator.

A bullish inside bar is formed with a bearish and bullish bar. The open price of the second one should be above the close price of the first, while the close price of the green bar would be below the open price of the red one. The inside bar pattern consists of two bars of different direction. The first one can be bullish or bearish and the second should be the opposite one.

Depending on the situation, outside bars can be bearish and bullish. Another way to find trends when trading with bars is to use various trend-following technical indicators. The downtrend is confirmed when all the lines move downwards. On the other hand, when all lines move upwards, the trend is bullish. For those aspiring to capitalize on larger price fluctuations and to profit from major trends, the platform offers Hourly and Daily timeframes. You can switch between them depending on your strategy.

A daily chart works well to analyze periods of over six weeks. It’s one of the most commonly used charts for analyzing intermediate to short-term periods. Once you are on the Supercharts, open the chart type menu on the upper toolbar and select “Bars.” Bar charts can be used to identify market trends as well as pinpoint reversals. Keep in mind that with the Binolla platform, you can change the color of both types of bars.

Master chart reading, and you can now see the market. I’ve laid out the keys below to give you a good grounding. To change the color, you need to click on the settings button at the bottom-right part of the chart and switch between colors there. However, keep in mind that we are using standard colors to make it easier for all how to trade with bar chart traders to read charts.

When it comes to the bearish inside bar, the situation is the oppsite. The open price of the second bar should be below the close price of the first, while the close price of the second should be above the open of the first. In this particular example, we have a couple of examples where the price rejects the higher band, which gives traders a reliable signal to buy a CFD or a Higher contract. First, bars are helpful when a trader wants to outline any price movement.

Why Traders Love Candlesticks:

The image above demonstrates how one can pinpoint the uptrend. The line connects the lowest points of bars where each one is higher than the previous one. Similar to Japanese candlesticks, trading with bars requires defining the right timeframe. For those who prefer short-term trading, including 5s scalping, the Binolla broker offers Seconds timeframes.

Candles are the most widely used charts and usually show more information than bar charts. This type of chart is an alternative way for a trader to monitor the price movement of an asset and spot trends to take informed decisions. Advanced traders at Bidsbee often use trading bots to scan for specific bar patterns across multiple assets simultaneously. This technique works particularly well for Bitcoin trading bots and Solana trading bots due to their liquidity and volatility.

If you want to capitalize on price fluctuations within minutes, then you can choose Minutes timeframes. To use a bar chart, you first need to identify the type of trader that you are. This will help you select the right period in your chart. Other popular alternatives to bar charts are baseline, renko, range, hollow candles, and heikin ashi, among others.

Bullish Patterns

Past performance is not indicative of future results. Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success. Patterns are extremely helpful when it comes to trading penny stocks along with large-cap stocks. Copyright © 2025 FactSet Research Systems Inc.Copyright © 2025, American Bankers Association. CUSIP Database provided by FactSet Research Systems Inc.

STOCK TRAINING DOESN’T NEED TO BE HARD

Day traders can then assess how the price is moving based on the bar chart. Those who make trading decisions based on those price bars are called price action traders. Trading charts are graphical representations of price movement over time. They display the historical and current price action of any tradeable asset, compressed into visual patterns that reveal market sentiment and potential future direction. A bar chart adds even more price data by including the daily price range. But it also incorporates the opening, high, and low prices.

Multiple Timeframe Analysis

The table below shows the difference between the three of the most popular types of charts. “Trading isn’t about being right all the time,” we remind our Bidsbee traders. “It’s about having an edge over many trades and managing risk when you’re wrong.” This is particularly valuable for day trading crypto or engaging in memecoin trading where speed often matters. “The patterns speak to us through the bars,” we like to say at Bidsbee.

• They also provide traders with valuable information about the open and close prices.
• They tell the story of supply and demand, emotion and logic, fear and greed.
• Check if volume supports the price movement for validation.

A bar chart is a collection of price bars, each showing the given stock’s real-time price movements. Each bar has a vertical line that shows the highest price the stock reached during the stock period and the lowest price the stock reached during the pre-set time period. The good thing is that it is pretty easy to read and interpret bar charts. And even if you’ll end up using candlestick charts to analyze the markets, you must know how to read bar stock charts as many news sites often use this chart type.

To outline the downtrend, traders can also use bars and a trendline. The simplest way to make sure that the price is going down is to connect the decreasing highs of the bar chart. As you can see, the descending line pinpoints the downtrend, allowing you to buy Lower contracts or sell FX CFDs. Apart from simply showing traders several price stances, bars can be used by market participants to find trends and even reversals.

The bullish outside bar is formed when the price is at the bottom of the chart at the support level. The first bar should be bearish, while the second one is bullish. The open and close price of the bullish bar should “engulf” those of the bearish one. This pattern is similar to that known as the bullish engulfing in the Japanese candlestick analysis. The other approach for using bar charts to trade is to use trendlines that connect support and resistance levels.

The high marks the stock’s highest price traded during the day and is indicated by the top of the vertical bar. The bars are colored red if the closing price is below the open price, which means the price dropped during that period. These alert signals go along with our stock watch lists. Our watch lists and alert signals are great for your trading education and learning experience. Likewise, on a weekly chart, each one represents a week. On an hourly chart, it’s an hour, then so on, right down to ticks.

We’ve found that bar charts shine when you’re trying how to trade with bar chart to spot relationship patterns between price and volume or when performing comparative analysis between multiple assets. A stock bar chart is essentially a visual snapshot of price action over time. Think of it as your market GPS—each bar tells you where a stock or crypto has been and hints at where it might go next. Our chat rooms will provide you with an opportunity to learn how to trade stocks, options, and futures.

• This type of chart is an alternative way for a trader to monitor the price movement of an asset and spot trends to take informed decisions.
• To trade a bullish outside bar, one needs to wait until the second bar of the formation is closed.
• Each bar includes the open, high, low, and close price that occurred during a specific interval, set by the trader.
• Although it doesn’t provide as much information as most charts, it highlights closing prices.

Unlike the line, where you can see the price at a particular moment only, a bar demonstrates the open, high, low, and close prices. With all this data, you can clearly see what has happened within a particular period. For instance, if you are using a bar chart for the hourly timeframe, you can see the open and close prices as well as pinpoint both extremes. There are several benefits of using bar charts in technical analysis.

How to Set Up Bar Charts on the Binolla Platform

The next paragraphs will provide you with some interesting strategies that you can use to find entry points. You can see some periods where there are only green bars or only red ones. If green bars follow each other, then we can say that the trend is bullish while a series of red bars tells us about the downtrend.