Also known as a bar graph, a bar chart presents values as a series of bars or bar pairs. In trading, bar charts are used to indicate the difference between the opening and closing prices of a traded asset for specific trading sessions.
Bar charts can be used to compare sets of values against each other using sets of bars and color coding. Sets can be compared against other sets in the chart.
There are many different uses for bar charts in investing.
In a simple example, a chartist may want to compare the daily increases or decreases in the prices of 5 different securities over a 30-day period. By grouping the closing rates of the 5 securities into a set of bars grouped alongside each other and using a new set for each of the 30 days, the chartist can compare the daily rates of the 5 securities against each other and track their progress across the 30-day period.
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