Charting Concepts
16 articles · 5 glossary terms
The settings underneath every chart — timeframe, scale, price adjustment, session coverage — and why two charts of the same stock disagree.
Foundations
Start here if the subject is new.Timeframes and Multi-Timeframe Analysis
A chart's timeframe is how much trading each bar summarizes. It decides what is signal and what is noise, and the same price series can give contradictory readings on different timeframes, both correct.
Chart Styles: Candles, Bars, Line, Area and Heikin-Ashi
Each style discards something different. Knowing what a style is throwing away is what stops it from misleading you.
Drawing Tools and How to Use Them
Drawings are a record of an analysis, and they are also the easiest way to convince yourself of something that is not there.
Real-Time and Delayed Market Data
Market data is licensed, and a delayed feed is a licensing outcome rather than a technical one. Knowing which you are looking at matters for anything time-sensitive.
Price Alerts
A price alert is a notification sent when a stock reaches a level chosen in advance. Its underrated function is that it lets a decision be made before the moment it applies.
What a Stock Alert Service Is
A stock alert service sends a notification when something specific happens in a stock: a price level is reached, a scan condition is met, or an analyst publishes a setup with its levels.
Stock Scanners and Screeners
A stock scanner tests a whole market against conditions such as price, volume, relative volume or gap size, and returns the stocks that match. The result is a shortlist to study on a chart.
Intermediate
Assumes the foundations above.Linear and Logarithmic Price Scales
On a linear scale equal distances mean equal dollars; on a logarithmic scale they mean equal percentages. Over long spans the two produce genuinely different pictures.
Adjusted and Unadjusted Prices
Historical prices are routinely restated so that splits and dividends do not appear as real moves. This is correct, and it means the chart does not show what the stock actually cost.
Extended-Hours Data on a Chart
Whether a chart includes premarket and after-hours trading changes its bars, its gaps and every indicator computed from them.
Chart Layouts and Saved Templates
A layout is a saved way of looking. Fixing it in advance is what makes comparisons across securities and across time meaningful.
Bar Replay and Reviewing Your Own Decisions
Stepping through a chart bar by bar, with the future hidden. It is the only charting tool that addresses hindsight directly.
Comparison Overlays and Ratio Charts
Plotting two securities together, or dividing one by the other. The second is more informative and is used far less.
Workspaces and Comparing Several Securities
Several charts on one screen. The value comes from them being configured identically, which is the only thing that makes the comparison real.
Reading Someone Else's Chart
A published chart carries a set of choices that are rarely stated. Establishing them is the first step in reading it, and most of them change what it appears to say.
Advanced
Detail, edge cases and methodology.Terms Defined in This Subject
Open one for its definition, and the article that explains it in full.
Frequently Asked Questions
What chart timeframe do day traders use?
Day traders commonly work on intraday charts such as the one-minute, five-minute and fifteen-minute, while keeping a daily chart in view for the larger structure. No timeframe is correct in itself: each one decides what counts as signal and what counts as noise, and the same stock can look different on each.
Read the full article: Timeframes and Multi-Timeframe AnalysisShould a chart use a linear or a logarithmic scale?
It depends on the distance covered. A linear scale spaces equal dollar moves equally, while a logarithmic scale spaces equal percentage moves equally. Over a long period or a large move the log scale shows the trend more faithfully, because a move from $10 to $20 and one from $100 to $200 are the same doubling.
Read the full article: Linear and Logarithmic Price ScalesHow do price alerts work?
A price alert is a condition set in advance, such as a stock trading above a chosen level, that the platform checks continuously and reports with a notification when it is met. Its real use is that the level is chosen while nothing is happening, so the decision about it is made before the pressure arrives.
Read the full article: Price AlertsWhat is a stock alert service?
A stock alert service sends a notification when something specific happens in a stock: a price level is reached, a scanner condition is met, or an analyst publishes a setup with its levels. A published alert is general analysis written for every reader at once, so the decision about acting on it stays with the reader.
Read the full article: What a Stock Alert Service Is