How To Read Stock Charts

Want a better understanding of how to read stock charts? Just got into the stock trading world and need to know how to decipher chart data? This is very easy to do once you've got the basics and use them consistently. Below are the key things that are shown on stock charts.

1. UMost stock charts will use the "candle stick" or a line graph chart. This is because these are the most common stock charts that traders are familiar with. The candle stick chart is a little more technical than the line graph chart, because it shows you in color code how much buying or selling there is with bars on the graph. It also shows you when buyers or sellers are considerably lessening their trades. It will identify this with a skinny line trailing what was once a sell bar or buy bar that was full of trading action. 
2. Every stock graph shows volume of trades. The volume data will not show you how many sellers there are compared to how many buyers there are. It will only show you the total volume of trades that are active whether buys or sells.
3. Understand a stock's moving average. Stock charts have a feature that will show moving averages for the stocks that you are following and doing research on. The most popular moving average data is the twenty-day moving average. It, like other moving average data, shows the average price level for a stock over a given period of time, which in this case is twenty days.
4. Stock charts will also have the current and last price for a stock. Current price of the stock will be displayed boldly, but the price it closed out at in the prior day's trading will be shown a little smaller on the chart. It will be under the header "last trade". There is also something called change of percentage. This means how much a stock's price has gone up or down based on percentage from the previous day's closing price.

University of Illinois: Introduction to Stock Market Investment