The chart - or what is called a "chart" - is a time map of a stock or cryptocurrency during a specific period of time.
The trader must possess many skills before investing in the financial markets, the most important of which is the good ability to read the chart and identify and recognize its most important features.
The American website Investopedia published a report by Adam Hess, in which he explained how a trader can control the reading of the chart, and the most important technical features of those charts.
🔛Types of “charts”
The writer said that the stock chart is divided in time from one minute to 15 minutes, half an hour, an hour, or a month, and may extend to 5 years. The chart generally aims to monitor the stock's movement and analyze its performance during a specific period of time. There are many types of charts, the most popular of which are the following:
🔥 “Candlestick Chart”: It is one of the most popular types of charts in circulation, and it is considered the favorite chart among the general public because of its ease of obtaining accurate information. One of the most important features of the candlestick chart is the use of green and red colors to determine market trends, and it also shows the opening and closing prices.
🔥Line Chart:It is the easiest way to learn about stock data, and it is the model that beginners rely on.
It shows the basic data for the stock, and its performance shows the levels of highs and lows during a specific period of time.In green, blue or black. If the stock's earnings decline or it suffers a loss, the column will be shaded in red.
The report indicated that the ability to understand the chart is an integral part of trading, as it helps you discover future price trends and plan your next deals. It also enables you to determine the price trends of the market, as prices move between a set of high and low paths.
The direction of the stock must be determined depending on the period of time during which this trend is taking place. There is a long-term trend, a short-term trend, and a medium-term trend, and sometimes these trends are similar to each other and other times they are opposite.
In another report published by the American Forbes website, writer Wayne Dugan shared information about how to read the chart, and what is the most important information and data you can get from it.
🔛Financial data for the stock
Through the stock chart, you can identify a set of basic financial data upon which the company’s evaluation and stock performance are based, including:
🔥The company's market capital.
🔥Stock price range within one day.
🔥Share price range over a full year.
🔥Previous closing price.
🔥Opening price.
🔥Trading volume.
🔥 Dividend return.
🔛Support and resistance lines
The chart expresses the movement of the stock price through graphic shapes that vary between the top and bottom of the curve, also known as support points and resistance points. By reading and understanding these points, it is possible to discover the price trend and determine the appropriate time to open or close the deal.
The report pointed out the need to become familiar with the “Elliot Waves” technique, which monitors the periodic movement of stock movements and divides them into three basic categories:
🔥Zig-Zag waves.
🔥Triangle waves.
🔥Flat waves.
🤍In the end, the report indicated that it cannot be said that there is a specific type of chart better than another, but it depends on the extent of your mastery and understanding of the details.
