A bar chart, in trading and technical analysis, is a price chart in which each time period is shown as a single vertical bar. The top of the bar marks the highest price reached, the bottom marks the lowest, a small tick on the left shows the opening price and a tick on the right shows the closing price. Because it shows these four values, it is also called an OHLC chart, for open, high, low and close. Each bar can represent a minute, an hour, a day, a week or any other interval.
Bar charts are among the oldest ways of presenting market prices in the stock market and remain a standard option on trading platforms, broker apps and crypto exchanges alongside line and candlestick charts. It should not be confused with the bar charts used in business reports to compare quantities. In markets, the word "bar" has become shorthand for a single period of price data, whatever chart type is used to display it.
Bar chart in plain terms
Imagine writing down the temperature outside every hour of the day. At the end of the day you could summarise it with four numbers: what it was in the morning, the warmest it got, the coldest it got, and what it was at night. Draw a line from the coldest to the warmest, add a small mark on the left for the morning and one on the right for the evening, and you have a bar for that day.
A price bar does the same for a share, a currency or a coin. Line up many bars side by side and patterns appear: days when prices swung widely, days when they barely moved, and stretches when each close was higher than the last. Traders read these patterns to judge whether buyers or sellers were in control, part of the wider process of price discovery.
How to read a price bar
Each bar holds four pieces of information:
- Open. The left tick shows the first traded price in the period.
- High. The top of the vertical line is the highest traded price.
- Low. The bottom of the line is the lowest traded price.
- Close. The right tick shows the last traded price in the period.
If the close is above the open, the period was up; if below, it was down. Many platforms colour up bars green or black and down bars red to make this easier to see. The length of the bar shows the trading range, a simple measure of volatility: long bars mean large swings, short bars mean quiet trading. A close near the high suggests buyers were strong at the end of the period, while a close near the low suggests selling pressure. In crypto markets, which trade around the clock, the open and close are set by a reference time, usually midnight UTC, rather than an exchange's opening bell.
Bar charts compared with other chart types
| Chart type | What it shows | Typical use |
|---|---|---|
| Line chart | Only the closing price, joined by a line | Long-term trends and simple comparisons |
| Bar (OHLC) chart | Open, high, low and close as a bar with ticks | Detailed analysis with a clean, compact look |
| Candlestick chart | The same four prices, with a filled body between open and close | Pattern recognition and short-term trading |
Bar and candlestick charts contain exactly the same data. Candlesticks, which originated in Japanese rice trading, make the gap between open and close more visible through a coloured body, so many traders find patterns easier to spot. Bar charts take less space and can be easier to read when many periods are shown at once, which is why some analysts prefer them for long histories.
Uses in technical analysis
Traders use bar charts to identify trends, support and resistance levels and chart patterns, and to place indicators on top of the price. Common overlays include moving averages and Bollinger Bands, while panels beneath the chart show trading volume or oscillators such as the relative strength index. Specific bar patterns have names: an inside bar has a high and low within the previous bar's range and is read as a pause, while an outside bar engulfs the previous range and can signal a change in direction. A key reversal bar makes a new high or low and then closes on the opposite side of the previous close. Gaps between bars, when a period opens well above or below the previous close, are watched closely in share markets.
Limitations
A bar shows only four prices and hides the path taken in between: two bars with the same open, high, low and close can come from very different trading sessions. The choice of time frame also changes the picture, since an uptrend on a daily chart may look like a downtrend on an hourly one. Patterns are subjective and do not reliably predict future prices, and academic studies of technical analysis have produced mixed results. Bar charts are a way of displaying data, not a forecast, and they say nothing about the depth of the order book behind each price. In thin markets, a single large trade can create a long bar that says little about the true balance of supply and demand, a problem that is common with small altcoins and assets with low liquidity. Traders also need to watch for wash trades that distort both price ranges and volume on less regulated venues.