Price Chart for Stocks
The A-B-Cs of reading a stock chart begins with the ability to look at and read a price chart. This should not be very
difficult, as the price graph is laid out in a logical manner. It is simple and straightforward, a good starting point
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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