Introduction to Price Charts

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Price Chart is a graphical representation of a series of prices over a given time period. For instance, a chart may display a stock’s price movement for one-year, such that each point on the graph represents the closing for each day the stock is traded.

Properties of a Chart

• Time Scale: Time scale refers to the time period specified at the bottom of the chart, which may vary from decades to seconds. The most frequently used time scales are intraday, daily, weekly, monthly, quarterly and annually.
• Price Point: Price charts are comprised of a series of price movements such that each price point on the chart is a full day’s trading condensed into one point. This price point on the graph can be simply the closing price or the open price or a high/low over the day. These data points are spread out over weekly, monthly and even yearly time scales to monitor both short-term and intermediate trends in price movement.
• Price Scale: The price scale represents the stocks current price such that the price moves from lower to higher as we move along the scale from top to bottom. The price scale can either be constructed in a linear or logarithmic way such that in a linear scale the space between each price point is separated by equal amount where in a logarithmic scale the distance between points will be equal in terms of percent change.