Candlestick Charts Versus Bar Charts
After using the Candlestick charts, you will find that bar charts do not provide
the same clarity. Despite the fact that the exact same information is
being conveyed, the Candlestick charts, through greater visual appeal, provide
information that is more communicative than bar charts. Candlestick
patterns allow the investor to identify pertinent information in a relatively
fast and unencumbered manner.
Bar Charts
A vertical line, seen here in Figure 1.1, represents the daily price movement
on a bar chart. The top of the line is the high of the daily trading range; the
bottom is the low of the day. A notch to the right side of the line represents
the closing price. In more recent years, a notch has been added to the left side
of the line to designate the opening price. Opening prices have not been as readily
available in stock transactions until a few years back. Futures and commodity
charts have had access to this information for a longer period of time.
Candlestick Charts
Using the same information provided in a bar chart, Japanese Candlestick
charts provide immensely more illustrative graphics. As in bar charts, the
open, close, high, and low are all that is required. Yet, the manner in which
they are depicted provides a great amount of information to the Candlestick
analyst.
After using the Candlestick charts, you will find that bar charts do not provide
the same clarity. Despite the fact that the exact same information is
being conveyed, the Candlestick charts, through greater visual appeal, provide
information that is more communicative than bar charts. Candlestick
patterns allow the investor to identify pertinent information in a relatively
fast and unencumbered manner.
Bar Charts
A vertical line, seen here in Figure 1.1, represents the daily price movement
on a bar chart. The top of the line is the high of the daily trading range; the
bottom is the low of the day. A notch to the right side of the line represents
the closing price. In more recent years, a notch has been added to the left side
of the line to designate the opening price. Opening prices have not been as readily
available in stock transactions until a few years back. Futures and commodity
charts have had access to this information for a longer period of time.
Candlestick Charts
Using the same information provided in a bar chart, Japanese Candlestick
charts provide immensely more illustrative graphics. As in bar charts, the
open, close, high, and low are all that is required. Yet, the manner in which
they are depicted provides a great amount of information to the Candlestick
analyst.
