Technical Analysis of stocks means to analyse the stock of a company in terms of technical views which means the movements or fluctuation of stock price, in technical analysis all what we do is the analysis of price movements like how the prices of stocks have moved in the past and what were the reactions of price at different circumstances and situations.
These price movements of stocks are recorded in the form of charts, there are various types of charting system available most commonly used chart for technical analysis of stocks is Japanese Candlestick Chart which helps to analyse stock for day trading as well as short term trading.
1792 – The Year in which operations started in NYSE
Types of Charts for Technical Analysis of Stocks
There are three types of charts used for the technical analysis of stocks and price movements i.e. Line Chart, OHLC Bar Chart and Japanese Candlestick Chart.
1. Line Chart: This chart is a simple line graph chart which records the price movements of stocks and further it is used for the technical analysis of stocks as these charts are very clear to analyse different patterns and trends and are very helpful for day trading.
2. OHLC Bar Chart: OHLC Bar chart is known as Open, High, Low, Close Bar chart which can be used for different time periods and it shows the Opening Price, Closing Price and High’s Low’s of stock prices for a particular period of time it is also helpful for day trading.
3. CandleStick Chart: This chart was mainly formed in Japan and mostly used by Eastern countries for day trading and short term trading, it helps in easy analysis of stock prices and then it helps to earn huge profits from the very beginning of trend or price patterns.
This type of chart records price movements in the form of candlesticks which signifies the Opening, Closing Price as well as the High’s and Low’s of stock price for a particular period of time.
In the above image you can see that when the price goes down the black candlestick is made and when the price goes up white candlestick is made, and the above and lower shadows of all candlesticks are their high’s and low’s of stock price.