OHLC Charts Explained -- with David Moadel
hello and welcome to looking at the markets with David Modell gonna talk
about ohlc bars it's an interesting alternative to
candlesticks or simple line charts things like that
and I think you're going to find them really interesting you might even choose
to start using them in your own trading or investing before I get started if you
want some help with your trading or with your investing if you'd like some help
putting together a plan because you really should have a plan otherwise
you're gonna have a lot of trouble succeeding in the long term you can
email me for coaching at David Modell at gmail.com let's get into into the ohlc
bars first of all what does that stand for
Oh a Chelsea open high low and close you may have already seen Japanese
candlesticks and they give you the same exact information Japanese candlesticks
tell you where the price opened for that period or for that candle where the
price opened where it closed also where the high of that period is and where the
law is okay in other words where it opened where did the price start during
that period the clothes where did it end the high how high did the price go
during that timeframe during that period the L the low how low did it go during
that period of time okay well Japanese candlesticks tell you
those four pieces of information so do the ohlc bars all right but they're a
little bit different just in the way they present this information these four
pieces of information visually so the high and the low are pretty simple you
have a call to stick if you want to okay I like to call this the stick and I call
these the arms I'm just imagining a stick figure without a head okay and you
got the two arms the right arm and the left arm that's what I call them you can
call them whatever you want so you got a vertical stick here and the bottom of
the vertical stick is the low how low did the price go during that period okay
and this is true whether this period could be one minute okay it could be
five minutes could be an hour four hours a day a
week a month alright just like with Japanese candlesticks you have you know
one minute and two minute and five minute and daily and weekly and hourly
candlesticks well you also have all those timeframes for for this so this
picture does not tell you how long this period is that is what you decide on
your charts but within that period whether it's a day or a minute or an
hour or whatever how low did the price go that's the bottom of the stick okay
how high did the price go that's the top of this vertical stick here all right
kind of like with the Japanese candlesticks it has wicks right you know
the bottom of the wick and the top of the way to tell you the low and the high
of the period all right so what about the open and the close well with
Japanese candlesticks you have a body all right which is like a rectangle
oftentimes they fill in the rectangle with red or green well with these ohlc
bars they're not going to fill it in or anything like that so the stick is flat
there's no body but they still have a couple of I call them arms alright you
have your left arm and your right arm now if the price closed higher then it
opened then you're going to have the open the left arm down here and the
closed arm is going to be higher than the open if it's an up day or up minute
or whatever period right alright so if it's an up period then it's going to
look like this right it's gonna be like left arm and then you go up and then
right arm okay open closed now what if it's a down period a down
minute or hour or day or whatever then the now the open arm is still on the
left in both cases and the closed arm is still on the right it's just that the
shapes gonna be a little bit different because the open is gonna be higher than
the closed so it's gonna go like this this and this right see what I did there
okay because the opens up here and the closes down there so instead of an up
day or a minute or whatever going like that it's more like this if it's a down
day or minute or whatever alright so the shape kind of looks
different but the open arm is still going to be on the left side of the
stick and then the closed arm is still going to be on the right side all right
you kind of have to get used to it now if you use let's say tradingview comm
you can use whatever platform you like I'm just showing you trading view
because it's free to use right now and everybody can look at it if they want to
so they actually help out a little bit visually as you can see and i'll i'll
make the bars a little bit bigger unfortunately they make the bars really
really skinny all right there the lines are very thin other platforms they're
thicker looking they look more like this alright so but anyway so but one thing
they do on trading view that's really helpful at least to me is visually that
you can see the the down periods are colored red and the up periods are
colored green hopefully you can see them again they're really skinny here so that
helps but I've seen other platforms where they're all just black or they're
all the same color and so you kind of have to just look at the shape okay you
don't really need the colors you can look at the shape for example notice
that the shape of this one and this is Apple stock one day you know the daily
chart so each of these represents one day but you could do this with the one
minute chart whatever you like so notice the shape on this one goes like this
down and that right okay so the the left arms up here the right arms way down
there and so even if this were not colored red you would still know that it
has this kind of shape and not this kind of shape so you know it's a down day a
down period alright just from the shape alright and then you take something I
don't know something like this one right we'll pull it over here alright so this
shape you can see the left arm is lower than the right arm
I know it's colored green but even if you didn't see the color you'd still
know it's shaped like that the left arm is lower than the right so this is an
update an up period it's shaped more like this then like that it's just a
couple of examples okay so what's something you can look
for what's the advantage of this well I don't know if it's really Advent
just over Japanese candlesticks because again both the Japanese candlesticks and
the ohlc bars give you the same four exact pieces of information all right
they do not give you the volume all right you could put the volume bars down
here let's say or something like that to give you the volume but they both give
you you know the the open the high the low and the close so let's let's take
this one right here you can see the the open is the left arm right and then the
low of the day was the bottom of the stick all right and then the high of the
day was the top of the stick up here and then the close is the right arm which is
up here and the the right arm is higher than the left arm and so it's an up day
all right that's just an example now if the two arms were exactly the same
height that would kind of like a Japanese candlestick has doji candles
right where the price open and closed at the same or almost the same price okay
so you could have that here all right kind of like this one this one right
here the left arm and the right arm are almost at the same spot so that's almost
like a doji candle and that's a sign of indecision in the markets oftentimes you
know the the trading community doesn't you know they didn't know whether to go
up or down so it just open and closed in the same spot approximately okay one
thing you can look for one advantage is you can really see the shape here for
example with this one yeah it's almost like you could tell that the price was
maybe gonna go down after this day after this candle why because the close is
near the bottom it's near the bottom of the knot the candle of the bar of the
ohlc bar okay so when it closes really close to the bottom all right then that
could be a sign that the the sellers are winning the sellers are in control and
you might not guaranteed of course but you might get more down moves and you
certainly did in Apple okay since this one closed near the bottom there's very
little stick pointing out below the close of the day it get closed at the
low almost right a close on the lows is usually a sign oftentimes a sign
that the sellers are in control and the next candles might be down and this one
in this case it certainly went down as you can see after this one down down
down down right okay so try them out for yourself see if you like them and if you
want more help with your trading or investing you can contact me for
coaching I offer it contact me at David Modell at gmail.com
thank you so much for watching and listening I will talk to you again soon
you