CANDLESTICK CHART :
Although Candlestick charts were created in Japan are on record as being the oldest type of charts, dating back to the 1700's, when they were used for predicting rice prices, that are still used today in modern trading.
More significantly, candlesticks are fairly easy to read with a little practice and offer a wealth of information in a chart. Each plot point on a candlestick chart consists of a rectangular shaped body (think of it as the candle) with a vertical line (the wick) extending from both the top and bottom parts.
The candlestick chart is similar to a bar chart, but it differs in the way that it is visually constructed. Similar to the bar chart, the candlestick also has a thin vertical line showing the period's trading range. The difference comes in the formation of a wide bar on the vertical line, which illustrates the difference between the open and close.
And, like bar charts, candlesticks also rely heavily on the use of colors to explain what has happened during the trading period. A major problem with the candlestick color configuration, however, is that different sites use different standards; therefore, it is important to understand the candlestick configuration used at the chart site you are working with.
There are two color constructs for days up and one for days that the price falls. Candlesticks are colored and typically a dark candle indicates a downward movement while a light one shows that the stock moved upwards.
When the price of the stock is up and closes above the opening trade, the candlestick will usually be white or clear. If the stock has traded down for the period, then the candlestick will usually be red or black, depending on the site. If the stock's price has closed above the previous day's close but below the day's open, the candlestick will be black or filled with the color that is used to indicate an up day.
Each candlestick can be read to learn about the stock’s highest and lowest prices as well as its opening and closing prices.
The candlestick charts have become very popular among traders as they compress all important information such as the session's open, high, low, and close into a space-efficient symbol called candlestick.
In the West, often black or red candle bodies represent a close lower than the open, while white, green or blue candles represent a close higher than the open price.
LINE CHART :
Of all the available chart types, the Line chart is the simplest one. It is plotted by obtaining the opening and closing price of the stock for each segment of the time frame. The line is formed by connecting the closing prices over the time frame.
The closing price is especially important to many traders who use line charts since it helps to keep out the distractions of minor fluctuations that occurred during the time segment.
This is the simplest form of chart available to the technical analyst with time presented along the X-axis and price on the Y-axis. The actual time function that you plot will depend on your position in the market - a market maker will be interested in price fluctuations on a minute-by-minute basis, whilst the average investor will only be interested in a price on a daily or even weekly basis. Any price may be plotted on a line chart, but the most common is the closing, mid-price.
The largest benefit to the analyst of drawing line charts are their simplicity. They present an uncluttered picture of price movements and are very easy to understand.
Line charts are also used when there is not enough data provided for a certain stock. This lack of data can also make it difficult for traders to predict the stock’s future movements.
Line charts do not provide visual information of the trading range for the individual points such as the high, low and opening prices.
However, the closing price is often considered to be the most important price in stock data compared to the high and low for the day and this is why it is the only value used in line charts.
OHLC CHART :
The Open-high-low-close chart (OHLC charts, also known as bar charts) expands on the line chart by adding several more key pieces of information to each data point. Unlike line charts, bar charts plot price data by using a series of vertical bars with a horizontal line intersecting each one on the graph. Each vertical bar corresponds to the price changes during the chosen time period.
The chart is made up of a series of vertical bars that represent each data point. This vertical bar represents the high and low for the trading period, along with the closing price.
The close and open are represented on the vertical bar by a horizontal dash. The opening price on a bar chart is illustrated by the dash that is located on the left side of the vertical bar. Conversely, the close is represented by the dash on the right.
Generally, if the left dash (open) is lower than the right dash (close) then the bar will be shaded black, representing an up period for the stock, which means it has gained value.
A bar that is colored red signals that the stock has gone down in value over that period. When this is the case, the dash on the right (close) is lower than the dash on the left (open).
This style of displaying data offers a little more information to traders than line charts, which can be far more helpful when predicting future trends.
Many analysts look for patterns in bar charts to make an educated guess as to how the market is going to move.
A bar chart shows at least three pieces of information: the high, the low and the closing price for each time interval. Some bar charts also contain a fourth piece of price information, the opening price. Each time interval (that is, day, week, or five-minutes) is represented by one bar.
Each bar represents one day's price action. Just as with the line chart, price data is placed on the vertical axis, and time is measured on the horizontal axis. A vertical line shows the trading range for that day. A longer line denotes a wider trading range during the day. Likewise, a short bar means that the spread between the highest price during the day and the lowest price during the day was small. A small tick mark on the right side of the bar indicates the closing price for the day. If the opening price for the day is recorded on the bar chart, it is represented by a small tick mark to the left side of the bar.
POINT AND FIGURE CHART :
Point and figure charts are one of the great secrets of the Technical Analysis world. Highly sophisticated and with a thoroughbred pedigree, they can, however, be overlooked by traders today.
The point and figure chart is not well known or used by the average investor but it has had a long history of use dating back to the first technical traders. This type of chart reflects price movements and is not as concerned about time and volume in the formulation of the points.
Charting the price action by Point & Figure charts (P&F charts) is a very effective method to know the true picture of the market trend by avoiding the market noises or insignificant moves in the stock, which can distort traders' views of the price trends. These types of charts also try to neutralize the skewing effect that time has on chart analysis.
When first looking at a point and figure chart, you will notice a series of Xs and Os. The Xs represent upward price trends and the Os represent downward price trends. There are also numbers and letters in the chart; these represent months, and give investors an idea of the date. Each box on the chart represents the price scale, which adjusts depending on the price of the stock: the higher the stock's price the more each box represents.
On most charts where the price is between $20 and $100, a box represents $1, or 1 point for the stock. The other critical point of a point and figure chart is the reversal criteria. This is usually set at three but it can also be set according to the chartist's discretion. The reversal criteria set how much the price has to move away from the high or low in the price trend to create a new trend or, in other words, how much the price has to move in order for a column of Xs to become a column of Os, or vice versa. When the price trend has moved from one trend to another, it shifts to the right, signaling a trend change.
In today’s world the information availability is very easy. Be it the fundamental factors which affect the financial market or the actual ongoing price data at every moment. Getting hold of the information is not an issue, what is important is how do we organize the various bits and pieces and process those to analyze the same in a meaningful way.
In speculative trading markets the prices change every moment but every move of the price is not important. here is a lot of movement and insignificant spike in the price-action which can be ignored simply ignored as meaningless. Point & Figure charting helps us in doing that in a very effective way.
KAGI CHART :
Kagi charts are price charts with thick and thin vertical lines connected by short horizontal lines. Just like P&F charts, Kagi charts only add a new vertical line when prices have reversed enough to cancel the current uptrend or downtrend. Until such a reversal occurs, a Kagi chart will only move up (or down) in its current column. Kagi charts do not have constantly spaced time axes. Here is an example of a Kagi chart:
The word "Kagi" comes from the Japanese art of woodblock printing. A kagi or "key" is the L-shaped guide in a woodblock that a printer used to line up the paper for printing. Because of this, Kagi charts are sometimes referred to as "Key charts." Kagi charts were popularized by Steve Nison in his book Beyond Candlesticks.
The thickness of the Kagi line changes depending on price action. The thick line is called the yang line and the thin line is called the yin line. The locations where the line changed from moving higher to moving lower are called "shoulders" and the locations where the line changed from moving lower to moving higher are called "waists". Whenever a yin (thin) line moves above the previous shoulder, it turns into a yang (thick) line. Similarly, whenever a yang line moves below the previous waist, it turns into a yin line.
The Kagi line will continue to move up (or down) until prices reverse by a specified amount. When that happens, a short horizontal line is added as well as a new vertical line which extends to the new closing price. There are several ways to specify the reversal amount - in absolute points, as a percentage, or by using the Average True Range of recent prices.
Although Candlestick charts were created in Japan are on record as being the oldest type of charts, dating back to the 1700's, when they were used for predicting rice prices, that are still used today in modern trading.
More significantly, candlesticks are fairly easy to read with a little practice and offer a wealth of information in a chart. Each plot point on a candlestick chart consists of a rectangular shaped body (think of it as the candle) with a vertical line (the wick) extending from both the top and bottom parts.
The candlestick chart is similar to a bar chart, but it differs in the way that it is visually constructed. Similar to the bar chart, the candlestick also has a thin vertical line showing the period's trading range. The difference comes in the formation of a wide bar on the vertical line, which illustrates the difference between the open and close.
And, like bar charts, candlesticks also rely heavily on the use of colors to explain what has happened during the trading period. A major problem with the candlestick color configuration, however, is that different sites use different standards; therefore, it is important to understand the candlestick configuration used at the chart site you are working with.
There are two color constructs for days up and one for days that the price falls. Candlesticks are colored and typically a dark candle indicates a downward movement while a light one shows that the stock moved upwards.
When the price of the stock is up and closes above the opening trade, the candlestick will usually be white or clear. If the stock has traded down for the period, then the candlestick will usually be red or black, depending on the site. If the stock's price has closed above the previous day's close but below the day's open, the candlestick will be black or filled with the color that is used to indicate an up day.
Each candlestick can be read to learn about the stock’s highest and lowest prices as well as its opening and closing prices.
The candlestick charts have become very popular among traders as they compress all important information such as the session's open, high, low, and close into a space-efficient symbol called candlestick.
In the West, often black or red candle bodies represent a close lower than the open, while white, green or blue candles represent a close higher than the open price.
LINE CHART :
Of all the available chart types, the Line chart is the simplest one. It is plotted by obtaining the opening and closing price of the stock for each segment of the time frame. The line is formed by connecting the closing prices over the time frame.
The closing price is especially important to many traders who use line charts since it helps to keep out the distractions of minor fluctuations that occurred during the time segment.
This is the simplest form of chart available to the technical analyst with time presented along the X-axis and price on the Y-axis. The actual time function that you plot will depend on your position in the market - a market maker will be interested in price fluctuations on a minute-by-minute basis, whilst the average investor will only be interested in a price on a daily or even weekly basis. Any price may be plotted on a line chart, but the most common is the closing, mid-price.
The largest benefit to the analyst of drawing line charts are their simplicity. They present an uncluttered picture of price movements and are very easy to understand.
Line charts are also used when there is not enough data provided for a certain stock. This lack of data can also make it difficult for traders to predict the stock’s future movements.
Line charts do not provide visual information of the trading range for the individual points such as the high, low and opening prices.
However, the closing price is often considered to be the most important price in stock data compared to the high and low for the day and this is why it is the only value used in line charts.
OHLC CHART :
The Open-high-low-close chart (OHLC charts, also known as bar charts) expands on the line chart by adding several more key pieces of information to each data point. Unlike line charts, bar charts plot price data by using a series of vertical bars with a horizontal line intersecting each one on the graph. Each vertical bar corresponds to the price changes during the chosen time period.
The chart is made up of a series of vertical bars that represent each data point. This vertical bar represents the high and low for the trading period, along with the closing price.
The close and open are represented on the vertical bar by a horizontal dash. The opening price on a bar chart is illustrated by the dash that is located on the left side of the vertical bar. Conversely, the close is represented by the dash on the right.
Generally, if the left dash (open) is lower than the right dash (close) then the bar will be shaded black, representing an up period for the stock, which means it has gained value.
A bar that is colored red signals that the stock has gone down in value over that period. When this is the case, the dash on the right (close) is lower than the dash on the left (open).
This style of displaying data offers a little more information to traders than line charts, which can be far more helpful when predicting future trends.
Many analysts look for patterns in bar charts to make an educated guess as to how the market is going to move.
A bar chart shows at least three pieces of information: the high, the low and the closing price for each time interval. Some bar charts also contain a fourth piece of price information, the opening price. Each time interval (that is, day, week, or five-minutes) is represented by one bar.
Each bar represents one day's price action. Just as with the line chart, price data is placed on the vertical axis, and time is measured on the horizontal axis. A vertical line shows the trading range for that day. A longer line denotes a wider trading range during the day. Likewise, a short bar means that the spread between the highest price during the day and the lowest price during the day was small. A small tick mark on the right side of the bar indicates the closing price for the day. If the opening price for the day is recorded on the bar chart, it is represented by a small tick mark to the left side of the bar.
POINT AND FIGURE CHART :
Point and figure charts are one of the great secrets of the Technical Analysis world. Highly sophisticated and with a thoroughbred pedigree, they can, however, be overlooked by traders today.
The point and figure chart is not well known or used by the average investor but it has had a long history of use dating back to the first technical traders. This type of chart reflects price movements and is not as concerned about time and volume in the formulation of the points.
Charting the price action by Point & Figure charts (P&F charts) is a very effective method to know the true picture of the market trend by avoiding the market noises or insignificant moves in the stock, which can distort traders' views of the price trends. These types of charts also try to neutralize the skewing effect that time has on chart analysis.
When first looking at a point and figure chart, you will notice a series of Xs and Os. The Xs represent upward price trends and the Os represent downward price trends. There are also numbers and letters in the chart; these represent months, and give investors an idea of the date. Each box on the chart represents the price scale, which adjusts depending on the price of the stock: the higher the stock's price the more each box represents.
On most charts where the price is between $20 and $100, a box represents $1, or 1 point for the stock. The other critical point of a point and figure chart is the reversal criteria. This is usually set at three but it can also be set according to the chartist's discretion. The reversal criteria set how much the price has to move away from the high or low in the price trend to create a new trend or, in other words, how much the price has to move in order for a column of Xs to become a column of Os, or vice versa. When the price trend has moved from one trend to another, it shifts to the right, signaling a trend change.
In today’s world the information availability is very easy. Be it the fundamental factors which affect the financial market or the actual ongoing price data at every moment. Getting hold of the information is not an issue, what is important is how do we organize the various bits and pieces and process those to analyze the same in a meaningful way.
In speculative trading markets the prices change every moment but every move of the price is not important. here is a lot of movement and insignificant spike in the price-action which can be ignored simply ignored as meaningless. Point & Figure charting helps us in doing that in a very effective way.
KAGI CHART :
Kagi charts are price charts with thick and thin vertical lines connected by short horizontal lines. Just like P&F charts, Kagi charts only add a new vertical line when prices have reversed enough to cancel the current uptrend or downtrend. Until such a reversal occurs, a Kagi chart will only move up (or down) in its current column. Kagi charts do not have constantly spaced time axes. Here is an example of a Kagi chart:
The word "Kagi" comes from the Japanese art of woodblock printing. A kagi or "key" is the L-shaped guide in a woodblock that a printer used to line up the paper for printing. Because of this, Kagi charts are sometimes referred to as "Key charts." Kagi charts were popularized by Steve Nison in his book Beyond Candlesticks.
The thickness of the Kagi line changes depending on price action. The thick line is called the yang line and the thin line is called the yin line. The locations where the line changed from moving higher to moving lower are called "shoulders" and the locations where the line changed from moving lower to moving higher are called "waists". Whenever a yin (thin) line moves above the previous shoulder, it turns into a yang (thick) line. Similarly, whenever a yang line moves below the previous waist, it turns into a yin line.
The Kagi line will continue to move up (or down) until prices reverse by a specified amount. When that happens, a short horizontal line is added as well as a new vertical line which extends to the new closing price. There are several ways to specify the reversal amount - in absolute points, as a percentage, or by using the Average True Range of recent prices.
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