Bar Chart (OHLC Chart)

The bar chart (Open-High-Low-Close or OHLC chart) was developed in the early 20th century as an improvement over line charts. Each bar represents four price points: open, high, low, and close. The left tick represents the opening price, and the right tick represents the closing price. This format provides a more detailed view of price movement, helping traders analyze volatility and price structure.

Importance

• Provides a detailed view of price movements.
• Useful for identifying trend reversals and price volatility.
• Helps traders analyze bullish and bearish momentum.

Limitations

• More complex to interpret compared to line charts.
• Can be misleading in low-volume markets.