Bar charts delivers more data per
block of time, it features opening prices, closing prices, price highs and lows
that shows real volatility of the movement. Line charts connect closing prices
as shown on our first example, but real volatility of the market is hidden since
it does not show price highs and lows. Transitioning from line to bar chart
reveals that sometime between the month of May and June, the price of our stock
ABC company experienced extreme price swings. This would entirely change our
impression about the stock since volatility can be a powerful weapon for gains
but riding that wave the opposite direction would be costly for losses.
A bar represents a
block of time, it can be 15 minutes, hourly, 4 hours, daily or yearly.