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If you’re serious about trading stocks you will have to be prepared to dedicate a lot of time and energy into learning all the necessary skills to become successful. You will also have to dedicate a lot of time learning how to use tools in order to better execute your investments.
Stock charts, also known as stock graphs, are one of the most important tools you can learn. In fact, as a stock trader, stock charts will become your best friend and they will provide you with the majority of data that you need to start investing in the share market. Without stock quotes it will be virtually impossible to buy stocks, it’s as simple as that.
Because of this, we have decided to dedicated a whole page to stock charts and live exchange prices. We will walk you through what stock charts are and how to use them, and we will provide you with some necessary tips related to these investment tools.
We are going to start with the basics and answer the question, what is a stock chart?
What Is a Stock Chart?
A stock market chart is a graphic representation of a stock quote and how that stock quote has developed over time. Depending on the chart and the information you’re looking for, stock charts might look very different and they might contain different sets of data.
The time frame can also differ, usual stretching from one hour up to several years. This means you can compare the stock market today with the stock market quotes from several years ago. One of the most common charts that most traders use are candlestick stock charts, we’ll talk more about them shortly.
Generally speaking, stock charts are provided by all services used for stock trading, from brokers to analytic tools, to online stocks exchanges, and so on. Even we provide price information from the share market live for many of the world’s leading stocks.
A stock market chart is the most fundamental trading tool that every trader uses, no matter what security that person trades with. The information contained in stock tickers are used for all existing strategies, which means that it is absolutely necessary that you learn how to use them.
Want to check out some industry-leading stock charts? Try one of our recommended brokers and their world-class tools:
Find the best trading platform. You capital is at risk when trading. Be careful.
What Is a Stock Price?
The stock price, also known as a stock quote or a shared quote, is the price of a stock at any given time. For example, if the Google stock (GOOGL) sells for $1,200 today, then 1,200 is the Google stock price today. However, a stock price is not a fixed number and it is something that’s constantly changing, mirroring the company’s performance and the stockholder’s interest in the company. In fact, stock prices are constantly fluctuating which is why you need to use tools that provide information about the share market live or real-time stock quotes.
Since a stock quote fluctuates on a daily and even hourly basis, you need a tool to keep track of the price changes, and that’s where stock charts come into the picture. Using a stock chart is the only way you can keep track of a stocks price development.
Stock quotes are used to evaluate how shares in a company are performing. You can learn a lot about a stock by comparing opening and closing prices and looking for price trends.
Stock quotes are also used to calculate numbers and ratios such as the P/E ratio and the PEG ration, which can be used to determine how much a company is valued at and whether or not the stock is overvalued or undervalued.
However, there is more to stock quotes and stock charts than that, and there are also several types of stock charts, see below.
Different Charting Tools and How to Use Them
A stock chart that provides stock market live prices is almost always a square shape consisting of numbers and data that at first may be confusing. Normally, the bottom part of a chart running horizontally from left to right (the x-axis) represents a chosen time frame. The left side running down and up (the y-axis) represents the stock quote. In between these two axes, you will find the stock price development running from left to right.
But that’s not all. You see, there are several different types of stock price charts. Below you’ll find an explanation of the four most commonly used stock market graphs.
Candlestick Charts – A candlestick chart is one of the most common stock charts on the market and these charts are used for a majority of stock trading strategies. The technique was first invented in Japan several hundred years ago, which is why they are often referred to as Japanese Candlestick Charts.
A candlestick chart consists of several vertical bars called candlesticks with lines sticking out in the top and the bottom. In most cases, these candlesticks represent the stock price movements for one day, and the chart usually showcases a trading month, e.g. 20 candlesticks. The longer a candlestick is the more the price has changed during that day.
Candlesticks also have different colors depending on whether the price closed high or low. Typically, a red or black candlestick means the price fell and a white candlestick means the price increased.
Naturally, candlesticks can be used for longer time frames where each candlestick represents a week, month, and so on, but note that monthly charts with daily candlesticks are the most common version.
Line Charts – A line chart is the most basic type of chart and they only represent the closing price of a stock quote over a set period of time. The chart is created by connecting the points of the closing price with a line, thus creating a classic line chart.
Since this type of stock chart only provides basic information, they are often not used to evaluate intraday trading patterns or to develop advanced technical strategies. However, since line charts are not cluttered with too much information and are excellent at providing a quick overview of price movements over longer periods of time, they are usually used to spot price trends.
Line charts are also the type of chart that is most often showcased on trading sites since they are the easiest to read.
Bar Charts – A bar chart is the upgraded version of a line chart. Instead of only representing the closing price of the said stock, bar charts provide information about the opening price, the highest price, and the lowest price. This means that vertical lines are added to each day on the basic line chart. Each vertical line also has a horizontal/diagonal line with dashes on each side that represent the opening and closing price.
Naturally, bar charts provide more detailed price data than a line chart and can be used for more advanced trading analysis and strategies.
Point and Figure Charts – Out of the four stock charts that we’ve mentioned, point and figure charts are the least common. In fact, this type of stock quote chart is rarely used anymore, at least not by the average trader. But it wasn’t always like that, this type of tool was important when price analyzing was a new thing, and for a very long time, it was one of the most commonly used charts.
What makes point and figure charts unique is that they don’t use any time frames or volume, which eradicates a lot of the clutter that’s normally represented on charts. It also provides a detailed overview of the stock quote, and only the stock quote, nothing more. Unlike the other charts, these stock charts only have a y-axis representing the price.
Stock Exchanges and Their Prices
Every stock is listed on one of the world’s stock markets on a so-called stock exchange. It is the stock exchange that provides the most accurate price of a stock and all other stock pricing tools get their stock price information directly from the exchange.
Today, all major exchanges have websites that you can visit to get the latest stock price in real time on their online stock markets. Although that doesn’t mean that the stock exchanges are the only reliable sources of share market prices today. Many stock charts and stock price services are connected directly to the exchanges, which means that they also provide the latest stock prices in real time from the share market today.
But why are stock market live prices so important?
The Importance of Share Market Live Prices and Live Exchanges
Since investments are based on the stock prices represented in stock charts, it is of the utmost importance that the stock price is live and provided in real time. Any time delay in the stock price can be devastating for day traders. We say day traders because it’s not as important to have real-time updates of the share market if you invest long term, although there is no excuse to not have the latest stock prices at hand.
As you can understand, having access to the latest stock prices today is something that all traders rely on, without this information it would be very difficult to trade. This is also why there are so many services that offer stock prices live.
Our Recommended Brokers and Their Tools
We’ve already mentioned that you can get the current stock quotes and information about the share market live from the world’s exchanges. But where else can you get information about stocks today?
One of the most practical solutions is to use one of our recommended CFD stockbrokers. They are all regulated and 100% safe to use and they all offer trading opportunities for the most popular stocks today as well as other assets. Additionally, all of our recommended stockbrokers provide us with the latest information with very professional stock market tickers.
The Best Stockbrokers Online:
- Plus500 is a renowned CFD broker with the main focus on stock trading. This top broker is world leading and extremely popular. Plus500 is also publicly traded on the London Stock Exchange which means that you can invest in Plus500 shares. In addition, Plus500’s stock charts have been featured throughout many pages on BullMarketz.com
- IQ Option is currently one of the most innovative brokers in the world. They offer a wide array of binary options and CFDs on the world’s leading asset classes such as cryptocurrencies and some of the best stocks you can buy. We honestly believe that IQ Option is one of the best brokers. Obviously, IQ Option offers a world-class stock chart and stock quotes in real time.
- Markets.com has been a favorite of ours for many years. When it comes to stock trading, few brokers can compete with Markets.com both in terms of selection and the quality of stock quote prices. Today they offer more than 2,200 underlying assets with the majority being stocks and indices, and there is no doubt that this is a great choice for anyone looking to invest in stocks today.
- Trade.com is one of the few brokers that can compete with Markets.com when it comes to the size of their selection. In addition, Trade.com’s trading product is solid and they offer some of the best technical trading tools out there including practical stock charts.
Stock Market Analysis
Online stock market analysis is a vast subject that can’t be shortened down to a few sentences, so we will only outline the fundamental idea of stock price analysis here. If you’re interested in learning how to analyze the stock market, we suggest you check out our stock analysis guide.
The point of using stock charts and calculating stock prices is to analyze the market for potential and value. In general, a trader is looking for a stock that is bullish with a high potential of continuing that trend. Other good features of a stock also include if it’s undervalued since that could indicate that it will bring in high profits.
When you find a stock that you think has potential and you have analyzed it and compared its price in different stock charts, it’s time to apply that data in strategies. There is obviously a huge amount of different strategies one can use, and different strategies work better for certain stocks than others.
It is essential to always use a strategy when you invest in stocks as well as other assets even if it is a very simple strategy. Otherwise, your investments will be a guessing game and your potential payouts will drop significantly.
Combining Stock Charts with Stock News
The last thing we’ll mention in this guide is the importance of combining price information about the share market with the latest stock news. By reading the financial news every day you will have all the latest information about certain stocks and companies, and you can potentially predict how the market is going to act. For example, stock news can provide hints of when a positive trend is about to turn for the worst, or if a company is preparing for a stock surge.
Naturally, combining stock charts with stock news gives you a great advantage and will help you better plan your investments.
Stock Charts Summary
Stock charts are tools used to analyze and evaluate stock prices in order to plan and execute investments. There are many kinds of charts, and depending on what you’re investing in and what style you use, certain charts are more fitting.
Learning how to read and use stock charts is fundamental for anyone looking to invest in stocks. It can, of course, be daunting to attempt to learn about all types of stock charts at once, which is why we recommend you start with one type before moving on to the next.
One of the most common and easiest to understand charts are candlestick charts and we suggest you start with them.
Don’t forget that we also provide information about other aspects of stock trading such as specific stock pages for the world’s leading stocks, investment guides, stockbroker reviews, strategies, and much more.