Smart investors who want to buy shares in a company will make sure that they have done all the research possible to ensure that the stock pick they are interested in will see an increase in price overtime. To do this requires that they look at as much information on the stock as possible. Stock charts will provide the investor with information on the stock’s past trading prices and volumes. This is of particular importance when it comes to technical analysis or chart analysis. Most investors trading stocks on the stock market today have some knowledge on stock picking. It is more than just buying a stock that was previously trading at $24 and now is at $17. This does not mean the stock is undervalued or cheap.
It is important to know why the share price has dropped, as well as what was the conditions on the stock market at the time of the decline. If the markets are bearish, it could be due to investors selling off their positions, in which case you could take advantage of the decline if the bottom of the down trend has been reached. Using stock charts with candlestick patterns will allow you to identify certain patterns that could indicate how a stock or market may move. There are other depictions such as the OHLC bar chart, but this does not give as much detail as the candlestick patterns.
Most technical analysts use candlestick stock charts to look for trends, reversals, or locate support and resistance points. These features, once identified, allow them to give their clients stock tips and advise them on when is the best time to buy or sell stock picks. This will allow the client to maximize his profits by getting in at the earliest possible time during an uptrend, or sell out before the stock price starts to go down. Stock charts provide a wide range of information for the investor, and should be analyzed along with any decision making.
If you are unfamiliar with how to use a stock chart, you should consider using a full service broker to help you. They will provide you with advice and recommendations on which stocks are undervalued, and do all the technical analysis to help build up your portfolio. For this full service, you will get charged higher commissions. However, this only needs to temporary until you get yourself up to speed on investing in the stock markets.