Gunny Walker

  Okay folks, so when you look at charts there are three basic types. There is the line chart that everyone seems to know. It's a basic chart that's pretty straight forward. The problem is that there are other charts that tell you much more information.
  Another popular version is the bar chart. Now this is a very popular form of chart. (No really!) The problem is that I never heard of this kind of chart until a few months ago when I first started reading about technical analysis. There is quite a bit more information located in this type of chart.   Now if you look to your right you will see an oversimplified version of a bar chart. There are four different parts to a bar chart. The part labeled "A" is the opening price. (Basically how much the price was at the first sale of the day or period stated.) The part labeled "B" is the high for the time period stated. "C" is the closing or final sale price. "D" is the lowest price at which the particular security sold. It tells you how the stock moved and how much it moved around. Now, below there are four bars.
  The four bars are the four basic movements that a stock can make. First there is bar A. It obviously shows that the stock opened at one price and closed higher for the day. It sold a little higher than the close and little lower than the open, but it was basically and "up day." B shows that the price opened near the close of the previous bar, but dropped in price. It never rose above the open. It was a "down day." The bar does not tell you whether it slid quickly downward. Now C shows that the stock closed and opened on the same price. It rattled around a lot during the day, but at the end of the day, it went nowhere. D is the simplest chart there is. It probably had one trade all day, or by some freak accident, all the trades were at the same price. If the stock hasn't traded at all that day there won't even be a chart. Sometimes there is one trade that is far off kilter can mess up the whole chart. It is possible to see a chart of the day that can give minute by minute details. (example)
  Technical analysis is a way of studying the past to predict the future. It's not perfect, but its a method that a lot of traders use.
  Now the third type of chart is known as a candle stick chart. It is blocks with lines, but essentially it is the same thing as the bar chart. The dark boxes are down days. The light boxes are up days. The information is the same, but with a lot more complex drawing. (I've heard that this type of charting began in Japan. Leave it to the Japanese to make things much more complex.) I find it distracting and unnecessary. All right, so now you've got the three basic charts. Now I've got stocks to watch. See you later.
  Read more about technical analysis.