Trading charts

A trading chart is a graph connected to financial market data which a person (or "trader") uses to help make informed decisions when buying or selling securities to profit from. Trading charts can be graphical representations of stock market prices, currency rates, commodity prices, treasury notes or any other tradeable security.

The data represented in a trading chart can range from weekly or daily historic prices to real time streaming information, minute by minute as the market moves. By using an open, high, low and close price (OHLC) of every price tick the data can be plotted in a variety of ways depending on the users preferance. Line, bar and candlestick charts are the most popular chart plots, but views such as mountain, dots and point and figure are also widely used. As the chart moves along its time axis the data plots are added to the chart making the price or security visually move up and down so the user gets a feel of how much momentum there is in a market at that moment.

Chart Indicators

Most trading charts come with a vast array of indicators to help make trading decisions, moving average, RSI and MACD are some of the more commonly used ones. These indicators give the user (or "trader") a visual aid to determine whether a market is changing direction or is showing signs of movement from which they could profit from.

Trading Platforms

It is very common for brokers to now provide customers with good quality charting software in their execution platforms, so the need for third party software has reduced somewhat. However as a "trader" becomes more advanced they may find that the limitations of charts provided by brokers impede their trading. There are many advanced charting solutions which you can purchase as a standalone product. These platforms can include advanced trading indicators and algorithms, automatic trade execution scripts and custom indicator building features.


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