Types of Stock Indices Charts

How to Understand Different Types of Indices Charts

There are different types of stock index charts used in stock index technical analysis & the three most common stock index charts are line charts, bar charts and candle charts.

Stock Index Line charts & Stock Index Bar Charts are not as popular as Stock Index Candlesticks Charts

Stock Index Candlesticks Charts are popularly used in the stock index market because the stock index candlestick shows the direction of stock index price movement based on the color of the candlestick. The distance between the opening price & closing price is called the body of the candlestick, the top and bottom lines are known as shadows and these represent the high and low of the stock index price.

The body of a stock index candlestick is based on the opening stock index price & closing stock index price of a particular stock index chart timeframe period.

If the Opening stock index price is lower than the closing stock index price the color of the candlestick body will be blue or green meaning stock index prices went up. A bullish stock index candle - price moved up - blue or green color stock index candle.

If the Opening stock index price is higher than the closing stock index price the color of the candlestick body will be red meaning stock index prices went down. A bearish stock index candle - price moved down - red color stock index candle.

The thin lines that protrude above and below the stock index candlestick body are called wicks or shadows.

Stock Index Bar Charts

Stock Index bar charts are used to display information that is similar to stock index candlesticks only that this charting method uses bars to plot stock index price movement instead of candlesticks. The bar has a line on the left and right side - the left side is the opening price & the right side is the closing price. Different colors are used for different bars to display the direction of the stock index price movement - green bars for when price moves upwards and red bars for when price moves down.

Stock Index Line Charts

Stock Index line charts are used to plot closing price as a continuous line on the stock index chart.

Line stock index charts are the simplest stock index charts that don’t give much details on the stock index chart because just a line is drawn to connect one stock index closing price to the next stock index closing price and this line chart will show a series of the stock index closing prices.

Stock Index traders use stock index charts to determine the direction of the market and to identify buy & sell stock index setups and signals.

The three commonly used stock index charts - Line Charts, Bar Charts & Candles Charts are provided for on the stock index platform - MT4 and MT5 platform and traders can choose the type of stock index charts that they want to trade with.

How to Understand Different Types of Stock Indices Charts

Different types of stock index charts can be used by traders to analyze, interpret and understand the supply and demand of a stock index instrument.

The stock index charts studies can help stock index traders identify various stock index setups that have different interpretations for supply & demand.

Stock Index traders can use these stock index setups to identify stock index signals of where to buy & sell & where to close open stock index trades.

To read a stock index chart a trader will need to learn about the three different stock index chart types.

Stock Index traders will also need to know about the various stock index chart timeframes for these stock index charts - 1 minute chart timeframe, 5 minutes chart timeframe, 15 minutes chart timeframe, 30 minutes chart timeframe, 1 hour stock index chart timeframe, 4 hours stock index chart timeframe, 1 day stock index chart timeframe, 1 Week and 1 month stock index chart time frame.

Types of Different Stock Index Charts