A bar chart is a great starting point for Technical Analysts to base their analysis on. The bar chart factors in both time and price and can be viewed in any time frame. 

The construction of a single bar is simple but extremely informative and can tell a trader many things about the market participant’s behavior as a group. When groups of bars are analyzed they may be telling a predictable story that's unfolding right before your very eyes.

The predominant features of a bar are the high, low, open and close. Each display very important information in relation to the bar contained within, as well as it's relationship to previous and following bars.

Bar Construction:

In bar chart construction the high price and the low price are very obvious.  The highest price and the lowest price for the particular time frame are connected together with a vertical line.  This line is also referred to as the ‘bar range’ which in itself is another piece of significant information to a trader - the length of this bar can tell us the strength or weakness of the buyers and sellers in the market.

Regardless of the timeframe of the bar chart there is always the opening price for that time frame which is displayed by the ‘tick’ to the left of the bar, and the closing price is displayed by a ‘tick’ to the right of the bar. Once again the relation of these to each other and to previous and future bars tells more information.
As a single bar, the image above shows that as soon as the bar opens there is a flood of buyers coming into the market and they push the market up finally closing at the high of a significant (long) bar range; there is obviously more buyers at this precise time than sellers, and the emotions of euphoria or greed is displayed, moving the market.

This next bar, above, has a small ‘bar range’ and the open and close are relatively close to each other. For this time frame the market has barely moved, there is generally low volume in market participants and generally reflects indecision of the markets direction, or is also explained as ‘temporary agreement of price’ between the buyers and the sellers.

Even the placement of the open and close in relation to each other holds important information. If the market opens and continues to trade up for the time period and closes significantly above the open, you can conclude there are more ‘bulls’ in the market (buyers). If, however, the opposite happens, where the market opens then trades down closing a fair way below the open, traders can see there are more ‘bears’ (sellers) in the market and they are lowering their prices.

The chart above has a sequence of bars.  The first 3 reading from left to right are all fairly ‘bullish’ in comparison to their subsequent bars, their open is low on the bar, which has a reasonably long range, and the close is up on the high. As each bar forms the market moves higher.
At the top bar the market ‘gaps up’ on open (creates a space between the close of the previous bar and the current bar) then proceeds to fall down for the remainder of the time period closing in the lower 1/3 of the range of the bar. The market then continues its decline, before finalizing with a very weak bar at the end where there was obviously a mad rush at the end to sell out of positions.
That final bar is the opposite of the initial bar displayed, the open and the close are a fair distance apart, and the range of the bar is long. This bar shows extreme weakness and that many sellers have come into the market.

Reading the bars as they correspond to each other could be considered a slight art form within itself, but the more you practice – the easier it becomes. As you gain experience you will gather more insight into the psychology of the market which will allow you to have a better guess as to where the market has the highest probability of heading in the near future.

Bar Reading is simply comparing the current bar to the previous bar/s. For example, an ‘Up’ bar means it has a higher high and a higher low than the previous bar.

Below we have two different bars, bar-A and bar-B. When slightly rearranged they become completely different types of bars. On the left, bar-B is set higher than bar-A so bar-B is classified as an UP BAR.
On the right is bar-B with a lower high and a lower low in comparison to bar-A, therefore bar-B is classified as a DOWN BAR.

Other variations are INSIDE BARS and OUTSIDE BARS. The inside bar is a bar with a lower high and a higher low than the previous bar, whereas the outside bar has a higher high and the lower low.

Inside bars are normally not so significant and are commonly found when the market is moving sideways, and show somewhat indecision in the market, like the market is pausing for breath.

The outside bar is quite significant and can be regularly found at turning points in the market.  In image 2.9 the outside bars have been highlighted in blue, and as you can see, they are regularly found at market turns. 
There's no saying how long the turn will last, but this is interesting information that a trader can use and incorporate into their trading plan.

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