What Do The Red And Green Bars In A Stock Chart Mean?

Stock Volume Chart Red Green

If you have looked at the price of any stock or ETF, you may have seen that the charts have some bars at the bottom.

Yahoo Finance Stock Chart
Source: Yahoo Finance

What do these bars mean and represent? Here’s what you’ll need to know:

What are the red and green volume bars in a stock chart?

The red and green colours on the volume bars represent how the stock’s price has performed relative to the previous period. If the price is higher, the bar will be green. If the price is lower, the bar will be red.

Here is a more in-depth explanation below:

The volume bar will be green if the current close price is greater than the previous bar

If the closing price of the current bar is higher than that of the previous bar, the volume bar will be green in colour.

For example, let’s look at Apple’s stock on Yahoo Finance and compare the volume bars between the 19th and 20th of January 2021.

Yahoo Finance Stock Chart Green Bar 1

Here are closing prices for these 2 days:

20 Jan 202121 Jan 2021
Close Price132.03136.87

The closing price on 21st Jan 2021 (136.87) was higher than that of 20th Jan (132.03). As such, the bar for 21st Jan will be green in colour.

This is also why the bar for 20th Jan is green too. The closing price on 20th Jan (132.03) was higher than that of 19th Jan (127.83).

If there are consecutive green bars, this means that the stock is on an upward trend! The colour of these bars will help you to visualise it much better.

The volume bar will be red if the close price is less than the previous bar

If the volume bar is red in colour, this means that the current close price is lower than that of the previous bar.

Let’s look at the same example for the Apple stock between 27-29 Jan 2021.

Yahoo Finance Stock Chart Red Bar
Source: Yahoo Finance

Here are the closing prices for these 3 days:

27 Jan 202128 Jan 202129 Jan 2021
Close Price142.06137.09131.96

There has been a downward trend in Apple’s stock price from 27-29 January 2021. This is why the volume bars for both 28th and 29th January are red in colour.

The red bars will help you to visualise this downward trend!

The period between bars can range from minutes to weeks

The colour of the bar always depends on the closing price of the current bar relative to that of the previous bar.

However, the period between 2 bars may not necessarily be 1 day! This depends on the period that you’re comparing the price of the stock.

If you are comparing Apple’s stock price over a 5-year period, the period between each bar is 1 week.

Yahoo Finance 5 Year Price Comparison 1

However if you’re comparing the stock’s price change in a day, it can be compared up to the closing price for each minute!

Yahoo Finance 1 Day Price Comparison

As such, it really depends on the scale that you wish to compare the trading volume.

The length of the bar represents the trading volume

The length of each volume bar represents the relative trading volume for that particular period, compared to other periods.

Let’s look back at the example from Apple.

Yahoo Finance Volume Bars 1 2

Here were the relative trading volumes for each of these days:

DateTrading Volume
16 Dec 202098.21 million
17 Dec 202094.36 million
18 Dec 2020192.54 million
21 Dec 2020121.25 million
22 Dec 2020168.9 million
23 Dec 202088.22 million
24 Dec 202054.94 million
28 Dec 2020124.49 million

The bars show that 18 Dec 2020 was the day which had the highest volume of trading among these 8 days. This can be easily visualised by the height of the bars!

This concept can be applied to all volume bars in different kinds of stock charts

These volume bars can be found in most trading platforms. As such, the same concept can be applied to any platform that you use!

For example, the volume bars can be found on Tiger Brokers,

Tiger Brokers Volume Bar

and Seeking Alpha (although the bars aren’t really that obvious).

Seeking Alpha Volume Bar

The meaning of the colour and height of these bars will be the same, no matter which platform you use!

You can change the colour of the bars

Some of these stock information platforms allow you to change the colours of the bars. For example in Yahoo Finance, you can click any volume bar to change the colour:

Yahoo Finance Volume Bar Change Colour

You can also change the volume bars on ThinkorSwim’s trading platform.

This helps you to customise the charts to how you like them to be!

Conclusion

The colour of the volume bars show the relative closing price of the stock for that period compared to the previous period. Meanwhile, the height of the bar shows the relative trading volume for that period.


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