Price action bars

Price Action bars

Price Action bars are one of the most important parts of the technical analysis. Those bars gives you a clear understanding of what was going at the moment in the markets at a specific time frame. The bars give you visual presentation about the “battle between buyers and sellers or supply and demand.” So basically this information is very vital for trading the markets.

There are four kinds of types for Price Action bars:

OHLC bars
Continuation bars
Reversal bars
Indecision bars

The OHLC Bars

What does the OHLC bar stand for? The OHLC stands for Opening, High of the day, Low of the day and Close.

When you look at an OHLC bar you might wonder what does it tell me?

Lets say you are looking at an OHLC bar of a stock of company A. Open means the start of a time window where securities are trade with a beginning price. Close means the end of time window where the price of a security has stopped. Lets say the open price of the stock company A was $1 USD, Highest price of that time window is $2,20 USD, the lowest was $0,99 USD and the closing price is $2 USD.

What does this information tells you? It shows you that the stock price of company A has increased by $1 USD in value on that specific time window. It also tells you what highest price was that investors have paid to get that stock and also the lowest price that investors have paid for the stock of company A. Now you know how the stock company A have performed in the market at that specific time window.

Time windows for bars

When you are in your account and open a chart, you will see that you can choose different time windows. For example you can choose a weekly time frame, daily time frame, 1-hour time frame and 4-hour time frame.

So each time frame gives you the information of how the performance of a security has been. Has the security been profitable last week? Has it been profitable today? Has it been profitable since this morning? Was there a price increase in the last hour?
Depending on your trading/investment style choose a time window of charts that fits you best. If you are a day trader, it can be good to look at bars with a time window of an hour. If you are monthly trader, use bars with a weekly time window.

What have you learned?

How to read a OHLC Bar (the basic of all kinds of bars)
What kind of information does an OHLC bar gives you.
You know there are at least 4 different time windows.

If you have any questions about this subject, please submit your questions in the comment section and we will answer your question as soon as possible.

If you have no questions, please go on and read about continuation bars and how that can help you to make money when trading.

Read on:

Back to Technical Analysis

Continuation bars

Technical analysis

Price action bars

Market cycles

Support & resistance lines

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