Chart of Bars

The charts of bars can be built easily in a delimited space by a vertical and horizontal axis. The vertical axis is the price.

In a chart of daily movements it is necessary to include up to two smaller movements. However, in charts that contain longer spaces of time, this degree of detail would go against its visual clarity. The horizontal axis is that of time. The unit of time considered as up to the likes of the investor. Most of the investors follow the prices on a daily basis, which is useful to be up to date with the short-term tendencies.

For longer periods of time, as for example five years, a weekly chart would probably be more practical. Those people that seek longer-term tendencies use the weekly charts.

Each bar represents the following prices for the period of time considered the highest, the lowest and that of closing.

The highest and the lowest correspond to the extreme of the vertical line, while the closing price is a small horizontal mark put at the right of the bar. (A mark to the left of the bar indicates the opening price of the session.)

You may draw by yourself these charts, although you can also purchase them already done and the only thing that you have to do is to complete them with the figures or real values or you may use a personal computer to introduce the data and in this way create the charts. With so many companies dedicated to this job, to draw the chart by ones own self is not only unnecessary, but also a waste of time.

Tendencies and tendency line
A tendency consists in a series of price changes that as one go in one or the other direction. An ascending tendency is the one composed by a series of peaks and valleys that united follows an ascendant line.

A descendant tendency is a series that goes downwards. When we find a series that fluctuates maintaining unisonous a line that is nor ascendant or descendant. We are observing a series without tendencies, and it is said that the market is moving horizontally or laterally.

• A primary tendency is the main tendency that the market follows during a long period (between six months and several years)
• The secondary lasts between one and three months
• The third in order lasts days or weeks.

In a chart of bars, a tendency is to identify by drawing a tendency line, that is no other thing that a straight line that joins two or more successive points (high or low).

An ascendant tendency line connects two or more low points, in a way that all the distance traveled is above the line. A descendant tendency line joins two or more high points, in a way that all the distance is under the line. Although these tendency lines can be outlined by only joining two points, you need at least one or more to validate them as such.

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