Reading Basic Bars: How to Pounce on Opportunities
In This Chapter
Seeing information in dots and lines
Interpreting trader sentiment from a single bar
Identifying trends 101
Applying bar reading in real time
You may think you understand the basic bar — it depicts the open, high, low, and close — so you probably want to get on to the juicy stuff. But hold on a minute. Each bar contains a vast amount of information, and seeing the real meaning of the bar and a small series of bars can make the difference between a winning trade and an unhappy surprise.
Bar reading is essential for all traders and especially guerrilla traders, who depend on bar reading more than any other style.
Reading price bars is the perfect application of the saying “Actions speak louder than words.” Traders may say that the price is going up, but the price bar tells you what they really think by showing you what action they took. Reading price bars is like being a detective examining the forensic evidence — and disregarding witness accounts.
Building Basic Bars
The price bar is the basic building block ...