Fine-Tuning Your Bar Charts
IN THIS CHAPTER
Setting custom styles for your bar charts
Trading with your daily and weekly bar chart styles
Bar charts — the topic of this chapter — give you the same information as candlestick charts (see Chapters 4 and 17), but the information provided is a little more discreet. The extreme tails seem to be emphasized more than the candle bodies.
Bar charts, which we introduce in Chapter 5, are used to recognize longer stock patterns, so you will find that different indicators are more helpful when you plan to hold an asset for a longer period of time. On a bar chart, you tend to look for consolidations rather than the information on a single candle, as you would on a candlestick chart.
On bar charts, your eyes are drawn to areas of consolidation rather than individual price bars. You’re more likely to use larger patterns, like new 52-week highs, prices around Keltner channels, or moving average crossover strategies with bar charts (Chapter 10 has more about these patterns). You can still use candlesticks with these types of patterns, but the candlestick information is based on one-, two-, or three-candle patterns, not larger patterns.
By using Keltner channels with a bar chart, you are less likely to be concerned with the individual bar ...