Stock Charts

Taking Assistance from Stock Charts – A Wise Move

Stock charts are something really important and in order to be a successful investor, you should know how to read and understand them. They can provide you with a visual representation about how a stock has been going through out a certain period of time. You can gain knowledge by reading stock charts over many aspects of the stock market including the market’s downtrends and uptrends as well. Chartists and technical analysts take stock charts very seriously as they helps them in analyzing the risk of various trades and get also to get an idea about future price fluctuations. The things such as futures, market indices, bonds, commodities, and stocks can be all jumbled up in a single term called securities that can be analyzed through these stock charts as well.

Not only the stock charts help investors in doing technical analysis of the stock market but also fundamental analysis can be done with the help of stock charts as well. The security’s price can be much easily understood through the graphical history record that a stock chart provides; the overall performance can give an idea about a trade’s good and bad times. When it comes to exhibiting the price data through stock charts, stock market makes use of 4 basic charts; candlestick charts, point and figure charts, line charts, and bar charts.

When you use a bar stock chart, to form the price plot of every period, the close, low, and high are required. There is a vertical bar present, the top and bottom of it represents the high and low and then there is a short horizontal short line across the vertical bar that represents the close. Every day stock market trading is recorded on this chart by bars that tell close, low, and high about each day’s trading.

When talking about taking assistance from stock charts in order to be successful, closing level is of more importance compared to low, high, or open. Usually when low, high, or open points are not available, line stock charts come in to use. There are certain indices for which only closing data is there and same goes with certain intraday prices and thinly traded stocks.

When we talk about only the stock price movement, point and figure stock charts come very handy. Where there is a very slight movement, it is ignored and only clear movements get recorded. On the other hand, candle stick charts show open prices, close, and low and high intraday only.