Investing into the stock market today requires that you are equipped with the best tools to help increase your chances of making a profit. There are many different signs and signals that you will need to understand. All of these signs and signals will help determine what decisions you make while trading stocks. When you are looking at investing in gold, one of the most important things to have is a gold chart. This chart is similar to a stock chart and will provide you with a history of price movements in the market. Once you perform chart analysis on all the data presented on the gold chart, you will be able to use this information for further technical analysis.
The information that is presented on the gold chart can be showed in different visual forms. It can be portrayed as a line chart, OHLC bar chart, point and figure charts, and candlestick charts. The easiest and simplest of these charts is the line chart. It presents information by way of a line connecting dots of the closing price each day. This basic information is good for beginners who need only to see the closing price of a stock pick at a glance.
An OHLC (Open High Low Close) bar chart is more complex than a line chart. A Gold chart that uses the OHLC visual representation will provide additional information for the investor. Its display uses a vertical line or bar, which represents a trading day. The highs and lows of the stock are determined by the length of the vertical lines. The vertical lines have short horizontal ticks going off to the left and right of the line. These ticks represent the open and close prices of the day, with the tick on the right usually for the closing price, and the tick to the left, the opening price. This additional information is very good for intermediate investors. It will allow them to see how their stock picks have performed during the day’s trading.
Candlestick patterns on a gold chart provides more superior information. It is favored by a technical analyst because it presents information that is easy to read and interpret. Through candlestick patterns, information on trends and reversals can be obtained. The display is depicted by candlestick figures. Each candle represents a day and has wicks at each end of its body. The wicks are known as shadows. The top and bottom ends of the candle body are the open and close prices. The shadows or lines are the highs and lows of the stock during the day. Candles can appear white or black. A white candle means that the stock closed higher than it opened, while a black candle means the stock closed lower than it opened. The body of the candle may also vary in length, depicting light or heavy trading.