There are many different types of stock charts: Each style and time frame has its advantages and disadvantages, but they all reveal valuable price and volume information that you can use to make profitable investing decisions. There are many different types of stock charts that display various types of information, however all stock charts display price and volume. On this stock chart, the blue and magenta colored marks represent the price history.

The amount of trading history each bar represents is based on the period of a chart.

How To Read Stock Charts

For example, on a daily stock chart, each price bar represents the prices the stock traded during that day. On a weekly stock chart, each price bar represents the prices the stock traded during that week.

Understanding Chart Patterns | gepahotalefi.web.fc2.com

The top of the bar corresponds to the highest price paid for the stock during that period, and the bottom of the bar corresponds to the lowest price paid. The small intersecting horizontal slash indicates the current price or where a stock closed at the end of the period.

Understanding Technical Analysis, Reading Stock Charts - gepahotalefi.web.fc2.com

The vertical lines displayed at the bottom of the chart represent the number of shares traded during the specific time period of the chart. The length of the volume bar indicates a value that corresponds to the scale at its right. Moving averages are plotted on stock charts to help smooth out volatility and point out the direction a stock may be trending.

It may also help provide context for the price or volume movements during a given period as it makes it easier to spot divergences from an established price trend. The red line cutting through the price bars is the day moving average. It represents the average price over the previous 50 trading sessions and is calculated by summing the closing price over the last 50 trading sessions and dividing by The black line is the day moving average.

It represents the average price over the previous trading sessions and is calculated by summing the closing price over the last trading sessions and dividing by This is a sign the stock is on the right track to continue rising in price.

The red line cutting through the volume bars is also a day moving average, but this one is an indication of the average number of shares traded over the last 50 trading sessions.

When viewing a daily chart, this line represents a day moving average volume level. This line is derived by summing the volume of the last 50 trading days and dividing it by Whether or not volume is above or below the average for a certain period could have a significant impact on your stock chart analysis. For example, above average volume on a daily stock chart can confirm or amplify the significance of a price move. When volume is below average, it becomes questionable whether prices will continue in that direction.

Your pop-up blocker may be preventing MarketSmith charts from opening. Click here for instructions to solve this issue. Incorporated unless otherwise noted.

We will send you a link to create a new password. ToggleForgotPassword ; break; case 'signinattempt': How To Read Stock Charts. Price and Volume There are many different types of stock charts: MarketSmith Stock Charts Stock Chart FAQs How To Invest: Charts Help Stock Selection, Timing.

Our most popular products Learn how MarketSmith can support your investment research. MarketSmith Pattern Recognition Growth Top Stocks Mobile Apps Take a Trial.

Learn more about investing Find more information to strengthen your market knowledge. MarketSmith Blog Stock Guide Webinars. Stock Charts Stock Market Video Tutorials.