Reading And Understanding Stock Market Charts
When you’re learning the stock market basics, one of the areas you want to know about should be understanding and reading stock market charts.
Several different types of charts are available for use to evaluate your stock portfolio or to evaluate stocks that you have an interest in and are wanting to research. A common chart to use to keep track of your current portfolio is the basic pie chart. The chart is circular and the sections of the pie represent the stocks you own in the quantitative proportion that they represent in your whole portfolio.
The chart can have labels that will give the stocks ticker symbol and commonly show the amount they have went up or down on that particular day. The chart can be color coded as well, to give you an idea of how your stocks are doing in a glance. Red would mean a down day, and green would be an up day. Keep in mind that your pie chart can show some stocks as green and some as red at the same time. They don’t all move the same direction at once!
The next chart you will need to learn to use is the line chart. This chart is easy to use and can be adjusted to give the information you need. You can track stocks that you own or stocks that you would like to find out more about before purchasing. These charts can be used to track price and/or to track volume (the amount of shares traded in a day). Variations of this chart would be the dot chart and the candle chart. The basic line chart is valuable because you can see patterns over hours, days, weeks, months or years.
You can read a daily line chart for a volatile stock that you are wanting to purchase for a short time period or you can use the line chart that covers a period of years to determine the stability of the stock for a long term buy and hold. The charts mentioned are the most common in usage. They can be printed out to study or you can watch your computer screen for live updates and chart progress while the market is open.
If watching the market move is of interest, there are trading platforms and steaming tools that will let you watch the market trade by trade, especially if you want to buy stocks online. You can get a lot of information from charts, but the important thing is to actually find the information that will apply to your needs and help you make the right investment decisions.
Tags: investment, stock market, Stock Market 101, Stock Market Basics, Stock Market Basics, Stock Market Charts, stock portfolio, stocks, ticker symbol, volatile stockRelated posts
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