Chart Types
Day traders use trading charts to watch the markets that they trade, and decide when to make their trades. There are several different types of trading charts, but they all show essentially the same trading information, such as the past and current prices. The most popular types of trading chart are :
· Bar Charts
· Candlestick Charts
· Line Charts
Chart Timeframes
Regardless of the chart type, all trading charts have a timeframe that determines the amount of trading information that they will represent. Some timeframes are based upon time, while others are based upon pieces of trading information, such as numbers of trades or contracts. The most popular timeframes are :
· Time
· Tick (Number of trades)
· Volume (Number of contracts)
· Price Range
Reading Trading Charts
Each chart type displays its information slightly differently, so they are read and interpreted slightly differently during trading. Detailed tutorials with examples of real charts are available for each chart type :
Charting Software
Day traders use charting software to create and view their charts. Most day trading brokerages provide charting software, but many day traders prefer to use additional charting software. Some of the most popular brokerage provided charting software, and additional charting software, are :
· Sierra Chart
· TradeStation
· ESignal
· TradeMaven
All of the above charting software include bar, candlestick, and line charts, and allow the charts to be customized according to the trader's preference.
