How to Read the Three Types of Stock Charts
To read stock price charts stock traders will need to first of all learn stock technical trading analysis.
This stock technical analysis study of stock price movement will analyze historical stock price moves using stock trends and stock chart patterns in an attempt to predict the next likely movement of the stock price direction.
A stock chart can be described as a graph representation of the stock price of a stock instrument over a specified stock chart time-frame period.
The stock charts use the y-axis or vertical axis to represent the stock price scale and the x-axis or horizontal axis to represent time scale. Stock prices are then drawn from left to right with the most recent stock price being plotted at the furthest point to the right of this stock trading chart.
The stocks chart can have different chart timeframes
MT4 Stocks Chart Timeframes
M1 for 1 Minute Stock Charts
M5 for 5 Minutes Stock Charts
M15 for 15 Minutes Stock Charts
M30 for 30 Minutes Stock Charts
H1 for 1 Hour Stock Charts
H4 for 4 Hours Stock Charts
D for Daily Stock Charts
W for Weekly Stock Charts
M for Monthly Stock Charts
MetaTrader 5 Stock Chart Time Frames
M1 for 1 Minute Stock Charts
M2 for 2 Minutes Stock Charts
M3 for 3 Minutes Stock Charts
M4 for 4 Minute Stock Charts
M5 for 5 Minutes Stock Charts
M10 for 10 Minutes Stock Charts
M12 for 12 Min Stock Charts
M15 for 15 Minutes Stock Charts
M20 for 20 Min Stock Charts
M30 for 30 Minutes Stock Charts
H1 for H1 Stock Charts
H2 for 2 Hours Stock Charts
H3 for 3 Hours Stock Charts
H4 for 4 Hours Stock Charts
H6 for 6 Hours Stock Charts
H8 for 8 Hours Stock Charts
H12 for 12 Hours Stock Charts
D for Daily Stock Charts
W for Weekly Stock Charts
M for Monthly Stock Charts
These stock chart timeframes are used to plot stock price data movement over the specified stock chart timeframe period and stock traders can then analyze stock price movements from these stock trading charts.
Using stocks charts makes it easier for stock traders to analyze stock price movements because stock traders can analyze stock price trends as well as stock price patterns.
Stock price charts are used to analyze supply and demand for the stock price movement. And changes in the supply and demand will be depicted in the stock price movement.
Stock technical analysis study is then used to analyze these stock price movements on the stock charts. Stock technical analysis assumes that all the market information has been factored in the stock price action movement based on supply and demand for a particular stock instrument and this supply and demand is depicted in the stock price action movement that occurs on the stock charts price movement.
The Three Stock Charts Types That are Used in Stock Technical Analysis
The three stock chart types used for stock technical analysis are:
- Line Stock Chart
- Bar Stock Chart
- Candlestick Stock Chart
Stock Line Chart
Stock line chart draws a continuous line from one closing stock price to the next closing stock price and this then depicts the movement of stock price of a particular stock instrument over a period of time on the stock trading chart.
Stock line charts do not provide stock traders with a lot of details and information about stock price movement and the only information plotted by this line stock chart is of where the stock price closed for a specific stock chart time-frame period.
The stock line chart can be used to interpret stock trends based on the direction of the stock line chart movement.
Stock Bar Chart
A bar chart is used to show the opening stock price, the high stock price, the low stock price & closing stock price.
The bar chart will depict the whole stock price range for each stock trading period - using the above stock price data points - opening stock price, the high stock price, the low stock price & closing stock price.
The vertical bar indicates the stock instrument trading range as a whole for the period
Tops of the bar indicates the high stock price
The bottom of the bar indicates the low stock price
A dash that is drawn to the left of the stock price bar indicates the opening stock price
A dash that is drawn to the right of the stock price bar indicates the closing stock price
Stock Candlestick Chart
A candlestick chart is used to show the opening stock price, the high stock price, the low stock price & closing stock price.
A stock candle chart is represented in a easier to read and interpret format compared to the stock bar chart.
Candle stock charts represent the same information as that of a bar stock chart but in a much easier to analyze format.
Stock Candles have two parts: the body of the candlestick and the shadow of the candle
Stock candlesticks have a body which is the difference between the opening stock price & closing stock price. The body of the stock candlestick will have different colors depending on the direction of the stock price.
Blue or Green Candlesticks for when stock price moves up
Red Candlesticks for when stock price moves down
The stock candlesticks also have protruding lines above and below the body of the stock candlestick - these protruding lines are known as shadows. The upper shadow represents the high stock price & the lower shadow represents the low stock price.
How to Read the Three Types of Stock Charts
