Investor’s Library: Fundamental Analysis, Technical Analysis, and Income Investing (Collection)

4. Jargon You Cannot Avoid

Here is the bare minimum of technical terms and concepts.

Bar Chart

The bar chart is the main market analysis tool in the western world and a key component of technical analysis worldwide. In East Asian countries, a form of charting called “candle charting” is the major tool, but the data series they both use are the same. Candle charts are covered in their own chapter at the end of this book.

Daily bars use open, high, low, and close data to summarize trading activity for each day. They are plotted together in a vertical line each day, as can be seen in Figure 4.1. Over time, the bars rise and fall to form the chart patterns that will be explained later.

Figure 4.1. Five-day bar chart of France ...