How Do I Read Bar Charts and Why Should I?
A Bar Chart or what others may call as a bar graph is a type of chart that has rectangular bars with relative lengths showing the value which it is representing. It acts as a paving way for people to view complicated information in a more simple and helpful aspect. This type of chart is being used to evaluate two or more values. Each bar is either horizontally or vertically oriented. Occasionally, a graphic which is quite stretched is used as a replacement of a solid bar. If you are not familiar with how this thing works, you might get yourself in a more complicated situation. Here are few steps which might help you for deeper understanding.
First of all, locate the X axis. It will be the point or label that would classify the information at the bottom of each bar, like the time frame, percentages or the names of what is being compared, such as months and others and after that look at the Y axis. On the other hand, this point is located at the left side of the bar graph and at the same time shows the value of what is being compared, such as how many objects or items were sold in a month or the comparison of each item from others.
Take a deeper depth in understanding the legend of the bar chart. These are small boxes of information located at the side of the bars. This will imply what the individual bars are trying to represent. Study the labels that classify each bar in a bar chart. The legend is not always shown in every graph, as the Y and X axis show the same information as well. Then find the correlating information on the bar graph. Typically, each bar on a forex bar chart will have a different color, which easily allows you to locate the information as outlined in the legend. That each bar in a bar graph may point out how much of a thing or what proportion of that thing is being referred.
Lastly try to have comparisons on the bars. By knowing and understanding what each colors mean, you can easily read the story of any bar graph. Evaluate the differences between the bars for these things will tell you the comparative numbers of items per given time frame.
The very common or usual chart being used which has bars is the currency chart. Currency chart represents currency prices that form vertical bars in a day and each bar also have the 4 hooks known as OCHL or the opening, closing, high and low rates of transactions at a certain time interval.
This type of chart is a graphic illustration of price action using a vertical bar which connects the peak price to the lowest price during a certain period of time. Bar Charts can be constructed for any time period in which prices are deemed to be available. Usually, the most common time interval for bar chart is hourly chart. On the other hand, although the availability of real time prices is wide, it is ordinary to use lesser time interval like 30 minutes, 15 minutes, 5 minutes, 1 minute.