Using stock chart analysis has become a standard in trading research for traders around the world. Before computers and computer graphics were available traders used to use graph paper and chart stocks by hand. Before that traders used to simply read the tickertape which contained the stock prices only. Today's trader have a tremendous advantage of high-speed computers and razor-sharp computer graphics to display their stock charts.
With new advances in technology it has become simpler to display a wide variety of different types of charts. The two most commonly used types are the “bar” chart and the “candlestick” chart. Candlestick charts have grown tremendously in popularity, especially in recent years. This is because the candlestick chart gives the trader a lot more information at a glance than many other chart types. For instance, a green or bullish candle instantly indicates an upward market and two or more indicate an upward trend. The reverse is true of the red or bearish candle. If you would like to learn more about candlestick chart we recommend that you go to the source of great candlestick trading information. That source is Mr. Steve Nison. Mr. Nison is credited with introducing the Western world to Japanese candlesticks.
Stock charts can be used for all different time frames of trading. They can range from longer-term monthly charts all the way down to short-term, one-minute charts. One common method of stock chart analysis is to start with the longer-term charts in order to see the “big picture”. Seeing the big picture will allow you to see the dominant trend of the market. From there you can look at charts of smaller time frames in order to narrow your focus and better time your trading entry. This type of stock analysis is also referred to as “Top Down” chart analysis.
Learning to use stock charts is an absolute essential for your trading success. You could easily get started for free by going to such websites as Yahoo Finance or Big Charts or MarketWatch. It's a good idea to visit these websites and start to look at the charts of any stock you may be interested in. Also don't hesitate to pick up a good book on reading stock charts to help you get better acquainted with stock analysis techniques.
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