How to Read Stock Chart for Beginner Stock Traders
Stock charts are used to illustrate the stock price movement of a stock instrument. This stock price movement is plotted on a stock chart and stock traders can analyze the stock chart patterns on the stock chart so as to determine when to open a buy stock trade or a sell stock trade.
Stock charts can be used by stock traders to gain a better understanding of the stock price movement based on analyzing past stock price data - this stock price data analysis is then used by stock technical analysis traders to predict the next likely future stock price direction.
How to Get Stock Charts
Stock charts are provided for on the stocks trading platforms such as the MT4 and MT5 stocks trading platforms.
To get stocks charts on MT4 and MT5 stock platforms:
MetaTrader 4 - To display the stocks chart in MT4 platform follow the step below:
- Go to the Market Watch on the Top Right of the MetaTrader 4 Stock Trading Platform
- Select The Stock Instrument that you want to trade
- Right Click on this Stock Instrument
- From the Pop Up Menu Select Open Stock Chart option to open the stock chart in MT4 platform
MetaTrader 5 - To display the stock chart in MetaTrader 5 platform follow the step below:
- Go to the Market Watch on the Top Right of the MetaTrader 5 Stock Trading Platform
- Select The Stock Instrument that you want to trade
- Right Click on this Stock Instrument
- From the Pop Up Menu Select Open Stock Chart option to open the stock chart on MT5 platform
How to Read and Interpret Stock Charts
Stock charts price movements can be interpreted using stock trend analysis & stock patterns technical analysis.
Stock trend analysis will determine if the stock prices are moving in an upward stock trend or a downward stock trend.
Stock chart patterns will try to identify commonly repeating stock chart patterns so as to try and determine what is the next likely stock price direction based on the technical analysis of these commonly repeating stock price patterns.
The three most commonly used stocks charts are:
Line Charts - stock line chart is a line connecting one closing stock price & the next. Line chart does not give much information about stock price movement compared to other stock chart types.
Bar Charts - stock bar charts show open, high, low and close of stock price - OHCL. Stock bar charts provide stock traders with a little more information than stock line charts.
Within the bar the opening price, the high price, the low price and closing price are represented.
The vertical line of a bar chart shows the stock price range for a particular stock price period the top of this vertical bar shows the high of the stock price while the bottom of this vertical bar shows the low of the stock price, two horizontal lines one to the left shows opening stock price and one on the right shows the closing stock price.
Candle Stocks Trading Charts - stock candlestick charts show the opening stock price, the high stock price, the low stock price & closing stock price.
The opening & closing price are used to determine when a stock candle is bullish or bearish.
Bullish stock candlestick is when the stock close price is higher than the stock open price.Bearish stock candlestick is when stock close price is lower than the stock open price.
How to Read Stock Chart for Beginner Stock Traders - How to Read and Interpret Stock Charts
