{"id":11690,"date":"2022-09-28T15:32:51","date_gmt":"2022-09-28T12:32:51","guid":{"rendered":"https:\/\/www.robomarkets.com\/blog\/?p=11690"},"modified":"2023-08-09T10:13:54","modified_gmt":"2023-08-09T07:13:54","slug":"how-to-analyse-stock-charts","status":"publish","type":"post","link":"https:\/\/www.robomarkets.com.cy\/blog\/education\/how-to-analyse-stock-charts\/","title":{"rendered":"How to Analyse Stock Charts"},"content":{"rendered":"\n

In this article, we will tell you how to read stock charts<\/a>, what parameters are included in the stock price<\/a>, and how stock candlesticks and bars are drawn. We will also evaluate the importance of factors for choosing promising securities, and demonstrate the main graphic patterns.<\/p>\n\n\n\n

<\/span>Drawing stock charts<\/span><\/h2>\n\n\n\n

The main instrument of a trader is a chart; it is where price analysis begins. The success of trading<\/a> decisions depends on how skilled an investor is in analysing the stock market.<\/p>\n\n\n\n

There are several types of charts: linear charts, bar charts, and Japanese candlesticks. They differ visually but are most often drawn by the same parameters. In most cases, these are the opening and closing prices, as well as the highs and lows over a certain timeframe.<\/p>\n\n\n\n

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<\/span><\/a>Linear chart<\/span><\/h3>\n\n\n\n

This is the simplest format of a stock chart; it is drawn by just the closing prices. For example, if a D1 timeframe is used, then the system automatically takes the price at the end of every day and adds it to the chart. Linear charts are hardly considered informative; therefore, traders rarely use them.<\/p>\n\n\n\n

\"Linear<\/a>
Linear stock market chart<\/em>*<\/figcaption><\/figure>\n\n\n\n

<\/span><\/a>Bar chart<\/span><\/h3>\n\n\n\n

Stock bar charts provide traders with more information. The vertical line shows the highs and lows of a certain timeframe; the adjacent horizontal line on the left demonstrates the opening price, while the one to the right indicates the closing price. These basics give the clue to reading stock bar charts.<\/p>\n\n\n\n

\"Stock<\/a>
Stock bar chart<\/em>*<\/figcaption><\/figure>\n\n\n\n

<\/span>Japanese candlesticks<\/span><\/h3>\n\n\n\n

This is one of the most popular stock market charts these days. Price movements look like a rectangle, black or white. Traders call these rectangles candlesticks. Let's look into the details of reading stock candlesticks.<\/p>\n\n\n\n

A white rectangle means that the stock is growing over the chosen timeframe, i.e. the closing price is higher than the opening price. The black rectangle means that the stock is falling over the chosen timeframe, i.e. the closing price is lower than the opening price.<\/p>\n\n\n\n

Vertical lines above and below the candlestick are called shadows and show the highs and lows over the chosen timeframe. Japanese candlestick combinations prompt traders to depict probable price movements to follow.<\/p>\n\n\n\n

\"Japanese<\/a>
Japanese candlestick chart<\/em>*<\/figcaption><\/figure>\n\n\n\n
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<\/span>Basic stock chart terms to know<\/span><\/h2>\n\n\n\n