Intraday Trading Charts

Intraday Trading Charts

Intraday trading charts typically depict ways in which price movement is expressed over a period of time. The day trading charts are the crucial tools in the trading arsenal. Referring to these charts helps in efficient decision making, these charts are useful in analyzing short-term, medium, and even long-term periods. The price fluctuation of the stocks can be analyzed in a better way with the help of intraday charts. The charts provide complete clarity about the performance of a particular stock. Intraday charts are the most commonly used and highly prominent amongst the intraday traders. This article will take you through the different types of charts and their significance.

Line charts are one of the most commonly used charts in intraday trading. The line charts only display the closing price. Each closing price is connected to the closing price of the succeeding day. The line chart provides a brief overview of the prices. But, this chart cannot be used in the decision-making process as it does not give an indication of the market trends.

The particular charts are an extension of line charts. Bar charts consist of vertical lines that represent the price range in a specified period. Bar charts also depict the open, high, and low prices. These charts offer other useful insights into the stock and are quite easy to understand. The tick chart is a type of bar chart.

Tick Charts

Tick charts are one of the best reference sources for intraday trading. When the trading activity is high, the bar is formed every minute. In a high volume period, a tick chart offers deep insights in contrast to any other chart.

Candlestick charts show the open, close, high, and low prices during the trading time. Candlestick charts can be used to make decisions based on the trends, these charts are best used for short-term analysis. Renko chart is an example of a candlestick chart.

Renko Charts

Renko chart is used to indicate the price movements. These charts are also used to identify resistance levels.

Now, let us look at the type of intraday charts, intraday time analysis and the importance of each chart below.

The hourly charts depict the price movement of a stock every hour. The particular chart provides very detailed information for that particular day. The hourly charts are very useful for short-term trades that last for a few hours to days. The chart displays opening, closing, high, and low-price of stock at every hour for the time period.

The 15-minute intraday charts display the opening, closing, high, and low price of a stock at every 15-minute interval. Even this 15-minute charts are used for short-term trades, typically lasting from an hour to a few trading sessions.

In 5-minute intraday charts, opening, closing, high, and low prices of a stock are depicted at every 5-minute interval. The particular chart is one of the most frequently used charts in the trading community. It is used by both short-term and long-term traders. The 5-minute chart is quite useful for quick scalps that last from several minutes to hours during an intraday trading session. Long-term traders use 5-minute charts to select the most optimal entry and exit points while initiating trades for a long period of time. In fact, it is highly recommended to use 5-minute charts for long-term investments in the share market.

The 2-minute charts represent the price action of stock for 3 hours. The chart represents the opening, closing, high, and low price of a stock at every 2-minute interval. The 2-minute charts are also a popular choice among short-term traders. Short-term traders used this chart for day trades and scalping, which ranges from a few minutes to a few hours during one trading session.

Tick-Trade charts are the line charts that represent every trade executed in the stock market. Every point on this chart represents an actual completed trade. In illiquid markets, lack of trades is displayed via flat line. On the contrary, in highly liquid markets, the graph consistently shows some movement and depicts increase or decrease in prices. The tick-trade charts are often used by traders for scalping and keeping track of “out of money” trades that need correction.

Always remember, the trader’s view often vary with the time period being analyzed. For being successful in intraday trading, analyzing the accurate time period is crucial, it will help you a lot in the long run.