Fig.30. The structure of the bar.
Now consider the concept of “bar”. The bar is shown in Fig.30. Bars were and remain a very popular reflection of the market situation and they were used and are used by the most eminent traders who started trading in the middle of the last century. And there is an explanation for this. In the author’s opinion, the bar is easier to understand and does not distract with bright colors and rectangles of candles cluttering the chart. The gap sizes are more clearly visible on the bars (more on this below). Let’s show examples of reading the market using bars in Table 1.
Table 1. Market situations depicted by bars.
The “PEAK ao” stock. In volume 1, a bar with a predominance of sales appears. We open an application at the beginning of the trading session in volume 2, having seen confirmation in the form of a wide gap down. We try to get out at the bottom point in volume 3, moving the stop order down following the price movement. We’re going out. In volume 4. we try to enter at the beginning of the trading session, because the long lower shadow in volume 3 indicates the beginning of a local bullish takeover. After T.5, we put a stop request. In volume 7, we see a sell signal – a bar with a long shadow on top. We go into the short and hold the position up to two bars with a small body in volume 8.
VTB PJSC stock. In volume 1, we see a sharp bar up, trying to reverse the local downtrend. In volume 2, we go short on reduced volumes. In vol. 3. we turn the position to Long. In the area of T.4, we exit at the end of the left long bar at the end of the session. The bar comes with a strong volume, which indicates a possible resistance. In vol. 4. we go into the short. In vol. 5, we turn over to the long without forgetting about the stop request. We exit at the upper end of the bar in vol. 5.