Price Chart for Stocks
The ability to read a stock chart begins with the ability to look at and read a price chart. The price graph is laid out in a logical manner. It is simple and straightforward, a good starting point for learning to get on the road to making better trades.
The baseline or horizontal axis of the chart is the time. Most often this is gauged on a daily basis, as traders generally look to see how a stock has fared over a short period of time. However this variable may be change to show any period of time: from minutes for those who trade intraday, to weeks, quarters, or years to those looking for longer trends. Most charting programs allow the trader to set their own parameters when it comes to time.
The vertical axis is set to price. This is also variable and can be set for variations ranging from pennies to nickels to dollars.
Reading the price chart is a simple matter. Unlike reading a book, start on the right and move to the left. This allows you to see the most current information first. Generally speaking, the most recent information is the most important to consider. The price chart can show if a stock is moving up, falling down or staying in the same general vicinity. It can show the general direction of the market or a sector of stocks. It shows you patterns and gives hints about which way the stock may move. But most traders admit, any technical analysis should begin with the price chart.
Stock Chart Basics
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