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How to Read a Price Chart

Price charts are one way to track the price action of the futures market.  One of the most commonly used price charts is the candlestick chart.

The diagram provided shows how to read both a green (bullish) and red (bearish) candlestick bar. The high/low of a candlestick bar is measured by the wick below and above the bars body. The open/close is based on where the bar began to form and where it ended. As you can see from the diagram, a bullish bar has the opposite open/close than a bearish bar. 

A few popular bar types include minute, tick and range bars. Each bar type provides a different way to view and read the market. A minute bar for example, forms after each minute and shows how the price moved during that minute. This shows the trader the open, close, high and low for that time frame.

A range bar, on the other hand, is set to a certain number of ticks before it can be formed. For example, a range bar set to 5 ticks will create a new bar after the market has moved a total of 5 ticks.

A tick bar creates a new bar after a specified number of transactions are made. A tick chart set to 500 will create a new bar after 500 transactions.

Choosing which chart type to use should be based on your individual strategy and how you like to trade.

To dive deeper, please check out our NinjaTrader bar types page for various bar types and descriptions!