How to read stock charts?
When you first open a stock chart, it can look confusing with all the line, numbers and movements. At its core, a stock chart is simply a picture of a company’s share price over time. The horizontal axis shows the timeline, and the vertical axis shows the share price. Each point or line tells you what the stock was trading at during that period.
The simplest type of chart is a line chart, which connects closing prices over time. This is often enough for beginners to get a sense of whether the stock has been going up, down, or moving sideways. More advanced traders use candlesticks charts, which show the opening, closing, high and low price for each day. A green candle usually means the price went up that day, and a red candle means it went down.
Charts can cover different timeframes. A one-day chart shows minute by minute changes, while a five year chart shows the long term trend. Beginners should focus on longer timeframes first, because they smooth out the noise of daily price swings and make it easier to see the overall direction.
Some investors use charts just to track their holdings, while others rpactice technical analysis, which looks for patterns that might predict future moves. For beginners, the key is to learn how to read the basic information. What price a stock is at, how it has moved over time, a how today compares to its history.