Copy-editors, high time to enlarge your financial knowledge !
You can hardly meet a person who has never seen financial stock exchange charts in magazines. Even many of us are yet behind the ears about those graphs.
However, the target sufferers of such mazes are translators and consequently copy-editors. Whatever adept financial translators or copy-editors they might be, they may collide with stock market diagrams which may appear quite imbroglio for them.
The below article serves for enlightening and educating copy-editors in case they come across with such notions and tables. Despite they are basics of stock market, they may far and wide arm copy-editors to enlarge their outlooks in case they need to edit similar indicators.
Foreword
Charts are the basis of technical analysis when trading on the stock exchange. They serve to visually assess the trends in the quotes of a particular instrument, predict price movements and analyze which positions are stronger - supply or demand. Read about how to learn how to read charts on the exchange in the article.
Types and features of stock charts
The possibilities of charts and their combinations are widely used during trading by both already practicing investors and beginners. Naturally, among the tools available there are many that are effective only for traders with rich experience. But there are basic types that can disclose information about an asset without unnecessary complications.
One of the most popular visual aids in the stock market is the price movement chart. There are several types of it.
Line charts. The simplest image of price movement, but at the same time it reflects only one component, which is not enough for making decisions. Bars. Sometimes they are also called bar charts. An informative visual version, which indicates the main indicators of interest - the minimum and maximum price levels for the selected time period, closing and opening prices. Japanese candles. A popular tool that reflects the same parameters as bars, but their visualization is more convenient. Point-to-digital. Another name is tic-tac-toe. These are columns of price changes, with a zero - a fall in the level by a given number of points, a cross - an increase by a similar value. The direction of the quote movement and the size of the jump are clearly traced, but there is no time reference. Histograms. They are not used separately, but supplement other charts, showing the volume of trades made. The higher the line height, the more active the asset turnover in the market.
The skill of reading charts is the basis for successful trading. In technical analysis, line, bar and candlestick charts are most in demand among traders. Let's consider each of them in more detail.
How to read line charts ??????
Bars are popular with Western traders. Much more informative than line charts - you can see not only the closing price, but also the opening price, the maximum and minimum for the trading period.
The appearance of the graph is vertical bars with serifs. Borders are the values of the minimum and maximum of the quote. The serif on the left is the opening price, and the serif on the right is the closing price. You can view the exact figures by hovering the mouse cursor over the part of the graph of interest.
Each bar represents fluctuations in the quote for the selected time-frame. It can be five minutes, one hour, one day. At the end of the next period, a new line is formed. The location of the serifs indicates the direction of price movement: if the left is higher than the right, there is a fall, if on the contrary - an increase.
Such charts also allow you to understand the general trend and predict price reversals. For example, in anticipation of economic or political news, the range of price fluctuations decreases - the bars become shorter, the market freezes. A significant increase in the length of the column towards the minimum or maximum from the serif signals a possible reversal of the price movement in the opposite direction.
Where to start if you've never done analytics
It is always difficult to start doing a new business, especially in the case of market analysis, where a lot of unfamiliar concepts and theoretical calculations awaits a novice trader. Prepare to absorb a lot of new information. Start by studying the general information and concepts, understand the specifics of trading and investing - our numerous articles will be happy to help you with this. In addition, various economic portals and news will be useful to you, it is there that you can find fresh data.
Understanding how stock analysis is approximately carried out will allow you to approach the main question - which trading operations are of interest to you. This is important to consider, since the two main areas of market analysis - fundamental and technical - are used for different operations. Fundamental analysis of companies' activities helps investors understand their advantages using various ratios and indicators, and the trader is more interested in the chart patterns used in technical analysis. To conduct successful trading operations, you should learn how to properly analyze the market, using all available methods in your work.
Stock market analysis methods
There are three main methods of analysis - fundamental, technical and intuitive. The first two types are better suited for different operations, the third is more versatile and can be used for market analysis in any case. Now let's talk about each of them in more detail.
Fundamental analysis is used to assess a specific company, more precisely, its business. Its value, in the opinion of investors, is equal to the price of shares, therefore investors are looking for shares at a lower price, counting on its growth in the future. Search so-called. undervalued companies is not easy and requires careful analysis in many respects. As a rule, first of all, investors take into account the company's net income, the size of its cash flow, the value of assets and liabilities, various financial ratios, the country's GDP, etc. This makes up a business assessment that is compared with the current share price. If, according to the calculations, the company turns out to be undervalued, then the investor can invest money in it with great confidence: the investment will pay off.
Technical analysis is used to assess the supply and demand that determine the current price of a stock. It involves the use of graphs and not numbers and coefficients. Many graphical figures with fancy names reflect price movements and allow us to conclude about the prospects of certain stocks, predicting the growth or fall of their value. Trading volume is another objective indicator of a stock that is used in technical market analysis. The number of transactions per unit of time shows the demand for a particular stock and allows you to draw conclusions about the trends of rising or falling prices.
Intuitive analysis consists in a careful study of the exchange news. Corporate earnings reports, analytic forecasts and other summaries can directly affect the price of a share. In addition, even tweets from politicians or other famous personalities can now drive prices up or down. Therefore, it is extremely important to take into account all incoming information and reckon with it: this will allow you to keep up with the times.