If you are wondering how difficult it is to read one, worry not. The entire process of mastering the art of reading stock charts, isn’t as difficult as it seems. All you need is basic knowledge of what to look for, and where to look for it, along with practice, practice and more practice! Before we begin with the method of reading one, let’s have a look at the different types of stock charts.
There are basically three types of stock charts: line charts, bar charts and candlestick charts. Line charts and bar charts are not very effective in predicting the stock trends and hence, are not so reliable. It is not possible to extract all the necessary information from these charts. The most popular type is the candlestick chart, also referred to as the Japanese candlestick chart. The reason for its popularity is that it makes it simple for traders to find the required information. However, the basic method to analyze and interpret a stock chart is the same, irrespective of its type.