As we have mentioned before, stock charts are an essential tool for technical analysis. They can tell you all the immediately relevant necessary information when it comes to a stock or index. However, not all charts display all the information you will need. There are various types of charts that you can look into, that tell you different information and have different uses. Your style of trading will strongly influence the kind of chart you will choose to use for the long term. Some are more popular than others, as is to be expected. Here, we plan to introduce you to the most essential of these.
Bar charts are the next level of stock charts that you can look for. It gives traders just a tad more information, without overwhelming them. It is not quite the traditional bar chart you would have come to expect. Instead, it can offer high and low prices for stock at certain periods of time. Thus, it offers traders a more accurate picture of how the market actually is. There is never anyone single price for a stock over all markets. People tend to haggle with each other, so you cannot expect prices to stay at one particular place. If it was so, the prices of stocks would never change. However, this also means that following this type of chart tends to be slightly harder.
It displays a certain number of symbols drawn vertically, whose relative number informs people of their relative movements. The Xs represent a rise in prices, while the Os represent a drop in prices.
However, it is hard to glean what the average price of the stock is over this particular time period. It only tells where the highest and lowest points were. Not the average.
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