Understanding stock charts is one of the most important skills for any investor or trader. Whether you’re analyzing long-term trends or studying short-term price movements, this glossary will help you confidently read and interpret stock charts.
📊 What Is a Stock Chart?
A stock chart visually represents a stock’s price movements over time. It helps you identify trends, momentum, volatility, and potential buy or sell signals.
This glossary covers all the essential terms you’ll see on stock charts—perfect for beginners and a great refresher for experienced investors.
📘 Stock Chart Glossary
1. Price Axis (Y‑Axis)
Shows the stock’s price levels on the vertical axis.
2. Time Axis (X‑Axis)
Displays the timeline—minutes, days, months, or years.
3. Candlestick Chart
A chart type where each candle represents price movement for a set period.
- Green/white candle: Price went up
- Red/black candle: Price went down
- Includes open, high, low, and close (OHLC)
4. Line Chart
A simple chart connecting closing prices over time.
5. Bar Chart (OHLC Chart)
Shows open, high, low, and close using vertical bars with side ticks.
6. Volume Bars
Show how many shares were traded during a period.
- Higher volume = stronger price movement
7. Trendlines
Straight lines that highlight the overall direction of the price.
- Uptrend: Higher highs & higher lows
- Downtrend: Lower highs & lower lows
8. Support Level
A price level where a stock historically stops falling.
9. Resistance Level
A price level where a stock historically struggles to rise above.
10. Moving Average (MA)
An average price over a specific period (e.g., 50-day MA).
- Helps smooth out volatility
11. Exponential Moving Average (EMA)
A moving average giving more weight to recent prices.
12. Moving Average Convergence Divergence (MACD)
A momentum indicator using EMAs to show trend strength.
13. Relative Strength Index (RSI)
Measures momentum on a scale from 0 to 100.
- Overbought: Above 70
- Oversold: Below 30
14. Bollinger Bands
Volatility bands above and below a moving average.
- Wide bands = high volatility
- Narrow bands = low volatility
15. Candlestick Patterns
Short‑term price signals formed by candle shapes.
- Doji, Hammer, Engulfing, Morning Star, etc.
16. Gap Up / Gap Down
When a stock opens significantly higher or lower than the previous close.
17. VWAP (Volume Weighted Average Price)
Shows the average trading price weighted by volume.
- Used by traders for entry/exit signals
18. Market Cap
The total value of a company’s shares.
19. Ticker Symbol
The unique identifier of a stock (e.g., AAPL, TSLA).
20. 52‑Week High/Low
The highest and lowest price over the last year.
📈 How to Practice Reading Stock Charts
- Open any free charting platform (TradingView, Yahoo Finance)
- Switch between chart types
- Add indicators like moving averages
- Study recent trends and major patterns
Summary
Learning how to read stock charts is essential for making informed investing decisions. With this glossary, you’ll understand the core components found on nearly every stock chart and be better prepared to spot trends and patterns.
(Not financial advice.)
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