πππ CHART TYPES IN TECHNICAL ANALYSIS πππ

Technical analysis is a major part of the trading process for an investor, which includes studying the chart types to understand the changes in the stockβs prices over time. However, there are so many kinds of charts that you can choose from to go through technical analysis. However, understanding the stock prices is even tougher than the rest. Letβs see what these chart types are and how they help traders conduct technical analysis.

πTypes of charts used for technical analysis

Technical analysis is pretty important for getting the correct price, which you can do by plotting the trend on the chart thanks to stock prices.

Several types of charts that weβll discuss are as follows:

1. Line chart
The most basic type of chart is the line chart which is represented by an x-axis and a y-axis. This chart type provides trading volume information along with the stock price. While the stock price can be denoted on the x-axis, the prices can be denoted on the y-axis, and the movement can be understood by their movement. However, you cannot determine the price volatility through this type of chart since we cannot understand it with simply the trading volume.

2. Bar chart
Moving along with the bar chart, it is like a line chart but better and more informative than the predecessor. The markings on the bar chart are in the shape of a line vertically made with two lines protruding horizontally through it. The marks on the bar chart denote four things which are high, open, low, or close. It is better than the line chart since it denotes the volatile nature of prices along with the actual prices. Intraday charts are those that represent the whole dayβs charting process which can be useful for technical analysis.

3. Candlestick chart
Candlestick chart is no different from a bar chart except that it is more efficient than others. It is made with rectangular blocks that have lines coming out of them where the upper line denotes the highest price of trading while the lower denotes the lowest price. A trader can understand the volatility of the market that moves through each day. It also denotes the high, low, opening, and closing prices on the candlestick. If you want to learn more about candlesticks, consider the definition & examples of a candlestick.

4. Point and Figure chart
This is the oldest type of chart and was used when there were no computers and all analysis was done manually. However, people hardly use this chart type anymore since it requires so much effort and is difficult to understand. A point and figure chart basically display the volatile nature of the stock prices through different periods of time. It is charted over an X and Y-axis.

A stock chart uses two axes to plot two different values and then compare them to conduct technical analysis for trading. This is the reason why traders need chart and chart types to decipher the usefulness of the price trends and how they will affect their trade too.

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