TYPES OF CHARTS

 TYPES OF CHARTS

1.What is a chart?

Charts are the working tools of technical analysts. They use charts to plot the price movements of a stock over specifc time frames. It’s a graphical method of showing where stock prices  have been in the past.
      A chart gives us a complete picture of a stock’s price history over a period of an hour, day, week, month or many years. It has an x-axis (horizontal) and a y-axis (vertical). Typically, the x-axis represents time; the y-axis represents price. By plotting a stock’s price over a period of time, we end up with a pictorial representation of any stock’s trading history. A chart can also depict the history of the volume of trading in a stock. That is, a chart canillustrate the number of shares that change hands over a certain time period.

types of price chart

 

1.line chart

“Line charts” are formed by connecting the closing prices of a specifi c stock or market over a given period of time. Line chart is particularly useful for providing a clear visual illustration of the trend of a stock’s price or a market’s movement. It is an extremely valuable analyticaltool which has been used by traders for past many years.

Line Chart In Stock Market



2.Bar Chart

Bar chart is the most popular method traders use to see price action in a stock over a given period of time. Such visual representation of price activity helps in spotting trends and patterns. 

Although daily bar charts are best known, bar charts can be created for any time period - weekly and monthly, for example. A bar shows the high price for the period at the top and the lowest price at the bottom of the bar. Small lines on either side of the vertical bar serve to mark the opening and closing prices. The opening price is marked by a small tick to the left of the bar; the closing price is shown by a similar tick to the right of the bar. Many investors work with bar 
 charts created over a matter of minutes during a day’s trading.

Bar Chart In Stock Market




3.Candlestick Chart

Formation

Candlestick charts provide visual insight to current market psychology. A candlestick displays the open, high, low, and closing prices in a format similar to a modern-day bar-chart, but in a manner that extenuates the relationship between the opening and closing prices. Candlesticks don’t involve any calculations. Each candlestick represents one period (e.g., day) of data. The
figure given below displays the elements of a candle.




Candlestick Chart Formation

Candlestick Chart










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