How to Read Stock Chart for New Traders

Stock charts are used to illustrate the price movement of a stock indices instrument. This price movement is plotted on a chart and stock traders can analyze the chart patterns on the chart so as to determine when to open a buy trade or a sell stock trade.

Stock charts can be used by stock traders to gain a better understanding of the price movement based on analyzing past price data - this price data analysis is then used by technical analyst traders to predict the next likely future price direction.

How to Get Charts

Stock charts are offered for on the platforms such as the MT4 and MT5 platforms.

To get charts on MT4 and MT5 platforms:

MT4 - To display the chart in MetaTrader 4 platform follow the step below:

Go to the Market Watch on the Top Right of the MT4 Trading Software
Choose The Instrument that you as a trader want to trade
Right Click on this Stock Indices Instrument
From the Pop Up Menu Select Open Stock Chart option to open the chart on MT4

MetaTrader 5 - To display the chart in MetaTrader 5 platform follow the step below:

Go to the Market Watch on the Top Right of the MT5 Trading Software
Choose The Instrument that you as a trader want to trade
Right Click on this Stock Indices Instrument
From the Pop Up Menu Select Open Stock Chart option to open the chart on MT5

How to Interpret Charts

Stock charts price movements can be interpreted using trend analysis & stock patterns technical analysis.

Stock Indices trend analysis will determine if the prices are moving in an upward stock trend or a down-wards trend.

Stock Indices chart patterns will try to identify commonly repeating chart patterns so as to try and determine what is the next likely price direction based on the trading analysis of these commonly repeating price patterns.

The three most commonly used stock charts are:

Line Charts - stock indices line chart is a line connecting one closing price & the next. Line chart doesn't give much information about price movement compared to other chart types.

Bar Charts - stock indices bar charts show open, high, low and close of price - OHCL. Bar charts provide stock traders with a little more information than line charts.

Within the bar the opening price, the high price, the low price and closing price are represented.

The vertical line of a bar chart shows the price range for a specified price period - the top of this vertical bar shows the high of the price while the bottom of this vertical bar shows the low of the price, two horizontal lines one to the left shows opening price and one on the right shows the closing price.

Candle Trading Charts - stock candlestick charts show the opening price, the high stock price, the low price and the closing price.

The opening and closing price are used to detect when a candlestick is bearish or bullish.

Bullish stock candle is when the stock indices close price is higher than the stock indices open price.
Bearish stock candle is when stock indices close price is lower than the stock indices open price.

How Do I Analyze Stock Chart for New Traders - How to Interpret Charts

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Trade Stock Indices

How to Read Stock Chart for New Traders

How to Get Charts

How to Interpret Charts