Stock Charts — Graphing the Journey of a Stock's Price

Stock Charts are the most important tool in the stock trading craft.

Let's first define what exactly a stock chart is and then look at some basic types of charts.

What are Stock Charts?

Quite simply, they are graphs that show us the price of a stock over time. Time is shown on the horizontal axis of the graph and the price is shown on the vertical axis. Here is an example of a simple chart for Google Inc.

The chart shows you how Google's stock has performed over a period of one year. The vertical axis shows the price in USD and the horizontal axis shows time in months. The bars at the bottom show volume — the number of shares that changed hands each day.

Types of Stock Charts

Let's look at some commonly used charts:

• Line Chart: If you represent the daily price of a stock by a point on a chart, and if you join these points with a line, what you get is a line chart. Let's study this particular kind of chart a little more...

• Bar Chart: With a Line Chart you can see the daily closing price of a stock over a period of time. But what if you wanted a summary of how the price moved during the day? This is called the intra-day price movement. A Bar Chart becomes useful here.....

• Candlestick Chart: This is another kind of chart that summarizes intra-day price movements. Said to have originated over 300 years ago in Japan, the Candlestick Chart offers a powerful visual....

How to Read Stock Charts

Now that we've covered the basic types of stock charts, let's get into the mechanics of reading and interpreting stock charts. Reading stock charts is as much of an art as a science......

Best Stock Charts

Where do we find some good stock charts on the web? We need something that is easy to use and rich in features if we need to customize. Moreover, we'd like it to be free.

Here are some resources on where you can find really good stock charts....

Stock charts are an useful tool to study price movements of a stock. It's the life-blood of technical analysis.

Here, we've looked at what stock charts are and the different types of useful charts. We've studied how to read and analyze charts and looked at some great websites that offer easy to use, free stock charts.

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