Bar Charts (OHLC)
Bar Charts: The Full Picture
A bar chart (also called an OHLC chart) provides much more information than a line chart. Each bar represents one time period and shows four key prices: the Open, High, Low, and Close — hence the name OHLC.
Reading an OHLC Bar
Each bar on the chart consists of:
- A vertical line — The top of the line is the highest price reached during the period. The bottom is the lowest price.
- A small horizontal tick on the left — This marks the opening price (where the stock started trading).
- A small horizontal tick on the right — This marks the closing price (where the stock finished trading).
What OHLC Data Tells You
Consider a single daily bar for KCB Group:
- Open: KES 38.50 — KCB started the day at this price
- High: KES 39.75 — The highest price buyers were willing to pay
- Low: KES 37.90 — The lowest price a seller accepted
- Close: KES 39.25 — The final traded price for the day
Since the close (KES 39.25) is higher than the open (KES 38.50), this was a positive day for KCB — the price went up.
Reading the Range
The length of the vertical line tells you about volatility. A long bar means the price swung a lot during the day (high volatility). A short bar means the price was relatively stable. This information is completely invisible on a line chart.
When to Use Bar Charts
Bar charts are useful when you want detailed price information but find candlestick charts too visually busy. They are popular among experienced traders who want to see exactly how each trading session played out. However, most modern traders prefer candlestick charts because the coloured bodies make it easier to quickly distinguish up days from down days.