Trading with Bar Charts: Guide to Analyze and Trade Stocks

June 27, 2023

Bar charts are one of the most popular trading chart types. They provide a lot of information that the day trader can use when making trading decisions and are relatively easy to read and interpret. That’s because bar charts consist of the open, high, low, and close prices for that particular stock.

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Risk management in crypto trading should always be your priority. Each trader determines the time it takes to form a bar on their stock chart. The only limitations are those of the charting software you use. Some software may limit your choices to a handful of options, such as five-minute, one-hour, one-day, one-week, and one-month bars. Others may allow you to fully customize bar time frames down to the second.

How to use a bar chart in trading

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• The other approach for using bar charts to trade is to use trendlines that connect support and resistance levels.

If the closing foot is below the opening foot, then the price made downward progress during the bar. The low is the lowest price traded during the bar and is indicated by the bottom of the vertical bar. The high is the highest price traded during the bar and is indicated by the top of the vertical bar. Price moves without volume confirmation are often false signals. Check if volume supports the price movement for validation. Mark major support and resistance levels where price has reacted previously.

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“When I first started trading crypto, I couldn’t tell a bar chart from a barcode,” jokes one of our Bidsbee traders. “Now I can spot a bullish engulfing pattern from across the room.” Ever stared at a trading screen filled with colorful charts and wondered which one actually represents the numbers you’re looking at? Many traders, especially those just starting their crypto journey, struggle with connecting data tables to their visual representations. Provides the same OHLC information as bar charts but with enhanced visual appeal and easier pattern recognition.

How to Set Up Bar Charts on the Binolla Platform

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.

The Bullish Bears team focuses on keeping things as simple as possible in our online trading courses and chat rooms. We provide our members with courses of all different trading levels and topics. We put all of the tools available to traders to the test and give you first-hand experience in stock trading you won’t find elsewhere.

For example, a bullish engulfing pattern reflects when the bulls take control. After you click on the color, you will see the palette from where you can change the color of both bullish and bearish bars. Like the inside bar pattern, the best approach to trade the outside bar pattern is to use buy-stop and sell-stop. It is characterized with a smaller red bar followed by a longer pattern. The idea is that it forms a sign that the bearish trend was starting to wane. The other approach for trading reversals and continuations is using the inside bar and outside bar strategy.

Line Charts

The closing price is the last price the stock traded for during the day and is indicated by the horizontal foot on the right side of the bar. The close price is the most critical data point on the bar because it summarizes the final sentiment of the preset period. Bar charts are one of the most popular chart how to trade with bar chart types to analyze financial assets. Like other chart types, they provide a lot of information traders and investors can use when analyzing the market.

SEC fillings and other documents provided by Quartr.© 2025 TradingView, Inc. They suit any trader — from novice to seasoned, and continue to evolve as new trading ideas emerge. However, as mentioned, we recommend that you test your ideas also with candlesticks and practice, in any case, in a demo account.

• Bar charts and candlesticks offer the same information to traders.
• Bar charts consist of an opening foot—facing left—a vertical line, and a closing foot—facing right.
• The bars are colored red if the closing price is below the open price, which means the price dropped during that period.

Reading the Market Story

Learning to read charts is like learning to read the market’s mind. Also, many brokerages offer free candlestick charts as part of their complementary platforms. You need to know how to read trading charts to grow your capital and live off your trading.

Our editors independently research our articles and review the best products and services. We may receive commissions on purchases made from links in articles. All information provided is for educational purposes and is not investment advice or buy/sell recommendations. Also, you can buy a Lower contract or sell when the price rejects the upper band of the indicator when it is within the envelope. We’re sorry, it looks like you’re located in the United States and you will be redirected to a different page.

Start with higher timeframes (daily, weekly) to understand the overall trend direction. Just choose the course level that you’re most interested in and get started on the right path now. When you’re ready you can join our chat rooms and access our Next Level training library. On our site, you will find thousands of dollars worth of free online trading courses, tutorials, and reviews. Click Here to try our trading community free for 7 days. Also, we provide you with free options courses that teach you how to implement our trades as well.