Best Trading Charts used widely
1. Daily Bar Chart: This is a chart which is widely used. It is shaped to display four different pieces of data; the opening price of stocks, the closing price of stocks, high price of the day and the low price of the day. A vertical line confines the range of the day with a horizontal line on the left to indicate the day’s opening price and a horizontal line on the right indicating the closing price.
2. Candlestick Chart: This chart has two essential parts. The first line is known as the ‘shadow’ revealing the range of price from high to low and the second part is a wide area on the chart known as ‘real body’. This confines the difference between opening and closing price and if the closing price is higher than the opening price, the real body is revealed in white. The candle stick chart provides price action situation for assessment for the trader to gain quick information between the high-low and open-close conditions. When the closing is higher than the opening indicating sell pressure, it is a hollow candlestick and when the closing is lower than the opening indicating sell pressure, it is a filled candlestick.
3. Point and Figure: This chart is concerned only with price and does not specify volume or time. It uses ‘X’ to show a rise in price and an ‘O’ to show a dip in price. This type of chart is useful in determining reversals and trends. On the other hand since time is not used here it offers little indication of the duration the stock trading will take to generate profits.
4. Head and Shoulders: This type of chart is more reliable and used by traders for online share trading. It signifies a reversal chart pattern and when it is formed, it indicates that the share in the stock market is most likely to move against the last trend.