#Stock market graph how to#

Daily trade range - Just like volume, each red or black vertical line on the chart represents one independent trading day.So, the taller the volume bar, the more shares of stock that were traded that day. Each bar represents one day, and the red line going through the tops is the average volume over the last xx days (in this case 60). Volume - Volume is extremely important as it helps determine market momentum.On this chart the red line is the 200 day moving average, and the blue is the 50 day moving average. Moving averages - Moving averages are a form of technical analysis that help identify support and resistance on a stock chart.If you view the dates left to right you will find that we are viewing a chart of the months of April, May, June, and July. Time period - The X axis always displays the time period.Bottom line is that the summary key tells us the important numbers from the stock chart we are viewing. These are the price moving averages which I will explain more in point #4. Below this we can see the blue and red lines (50 and 200) MAs. You can view charts on weekly and even monthly views.

To left of this number it says '(daily)', which means we are looking at a DAILY chart of the index.

Summary key - The first number displays 2303.54 which is the last price of the index.

Just like Google has a ticker of GOOG, and Microsoft has a ticker of MSFT. The $COMPQ is the ticker symbol of the index. So, if we look to the left of one we can see very clearly that we are looking at a chart of $COMPQ (Nasdaq Composite) INDX.

Chart identification - Every chart is labeled and tells you what exactly you are looking at.

Below the chart I will explain these parts and what they mean when it comes to reading a stock chart. Stock chart componentsīelow I have taken a stock chart of the NASDAQ Composite and labeled the main parts. By exploring the options each approach provides, investors can determine which type best meets their needs for reading stock charts. how long it will take for profit objectives to be met.Įach chart type for performing technical analysis has its benefits. However, since time is not used as an input, P&F charts offer little guidance on timing, e.g. With this approach, it is easier to spot trends and reversals. The chart uses an 'X' to mark increases in price and an 'O' to mark lower prices. Point and figure charts – A point and figure chart is concerned only with price, not time or volume. For them, a line chart may be the most appropriate study.Ĥ. Many technicians believe closing price is the only point that matters. Line charts – A line chart measures only the closing price and connects each day’s close into a line.

If the close is higher than the open, the real body is white.ģ. The wider area, known as the “real body,” measures the difference between the opening price and the closing price.

The first is the thin line, known as the “shadow,” which shows the price range from high to low. Candlestick charts – This chart presents the same data as a bar chart, but in a slightly different format. Looking at each day’s history, a vertical line shows the day’s trading range with a horizontal line pointing left to mark the opening price and a horizontal line pointing right to mark the closing price.Ģ. It is constructed to show four pieces of information: opening price (optional), closing price, high of the day, and low of the day. Bar charts (HLC / OHLC) – This is the most widely used chart and the default used throughout the site here on. What types of charts are available? For studying the markets by reading stock charts, here are the four main chart types used:ġ. Contrarily, if you like to base your investment decisions on sales growth, total debt, and metrics like EPS (earnings per share), then you are likely interested in fundamental analysis. By understanding price patterns, traders have an edge at predicting where the stock is going next.ĭo you enjoy reading stock charts and looking at volume trends, support, resistance, and drawing trendlines? Well, then you are very focused on technical analysis, which this guide introduces.

#Stock market graph how to#

Learning how to read stock charts is crucial for stock traders that want to perform technical analysis.