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Technical Charts are very popular among active traders and fund managers.However,it is difficult thing for common people.Charts show the momentum in stocks or the market.Chartists analyse details such as price and volume of the scrip.They use multiple time frames such as intraday,daily,weekly or monthly charts to predict the future price movement. Longer the time frame, prediction will be more accurate.
Chartists use Line charts, Bar charts or Candlestick charts. Line charts connect the closing prices of a stock during a specified time period.It depicts general price trend.But,Bar charts and Candlestick charts help us to analyse the whole picture- open,close,high and low prices.So, evaluation will be more clear in bar charts and candlestick charts.
Most of the traders prefer candlestick charts.If close price is above the open price,it is a bullish candle.If close price is below the open price,it is a bearish candle.High and Low prices are known as' Shadows'.Difference between open and close price is the 'Real body' of a candlestick.White or Green colours are used for bullish candles and Black or red colours in bearish candles.
Active traders should practice any chart to analyse and predict the future direction in stocks,commodities or currencies.
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