StockMarketEye BlogReading Colors ter Stock Charts – Green and Crimson Explained – StockMarketEye Blog
Posted on Thursday, Sep. 11th 2014
Stock charts are a useful way of viewing the historical price movement of a security. The visual ups and downs of the line te the chart convey meaning ter a way that a table total of numbers can not. One quick glance at a chart can give you meaningful perspective on the stock’s past show and serve spil a useful gegevens point ter your analysis.
A typical line stock chart te StockMarketEye looks like this:
The upper portion of the chart is called the Price chart. Ter the example above, the blue line shows the closing values of the stock. Moving the mouse overheen the chart will display the chart cursor. The details of the day under the cursor are shown ter the top line of the chart area.
The lower portion of the chart is the trading Volume chart. The taller the caf, the more volume there wasgoed on that day.
The colors te the Volume chart also have meaning. A green volume buffet means that the stock closed higher on that day verses the previous day’s close. A crimson volume caf means that the stock closed lower on that day compared to the previous day’s close. A black volume caf means either that the stock closed at the same price that day spil it did the day before, or that the chart does not have the previous day’s closing price to compare with (such spil te the very first volume tapkast te the chart).
Green and Crimson ter the Price Chart
Ter the Price chart, both the Candlestick and Open-High-Low-Close (OHLC) chart styles convey reserve meaning when compared to a elementary line chart. Instead of a single point (i.e. the closing price), the day’s activity is shown spil a symbol, ter which the day’s Four gegevens points (i.e. the open, high, low and closing prices) are drawn.
The green and crimson versions of the Candlestick and OHLC chart styles convey toegevoegd meaning through the colors. This same meaning is also visible te the monochrome version of thesis chart styles, but some investors find the green and crimson versions help them to interpret the meaning quicker.
The next chart shows the “Candlestick Green/Red” stock chart type te activity. A green candlestick means that the opening price on that day wasgoed lower than the closing price that day (i.e. the price moved up during the day), a crimson candlestick means that the opening price wasgoed higher than the closing price that day (i.e. the price moved down during the day).
Compare that with the monochrome version of the same chart. A green candlestick is omschrijving to an open candle of the monochrome “Candlestick” chart type, a crimson candlestick is omschrijving to a packed candle.
When the Colors differ inbetween the Price Chart and the Volume Chart
Albeit both the Price chart and Volume chart can use green and crimson to convey meaning, the meaning of the colors is slightly different ter each of thesis chart types. Sometimes the candlestick or OHLC’s color will be different from the volume folder’s color.
For example, if the stock finished higher than the previous day, the volume caf will be green. But on the same day, if the stock moved lower from the opening price, the candlestick would be colored crimson.
This situation is not that uncommon. For example, if there wasgoed a gap up at the open (because of positive company news, analyst recommendation, etc), but the stock moved lower from that point across the day, yet staying above the previous day’s closing price, the candlestick would be colored crimson, but the volume brochure would be green.
Colors can be useful to help convey toegevoegd meaning ter stock charts. Knowing how each color is used te the different parts of the stock chart will help you interpret their meaning quicker and get more out of the chart.
StockMarketEye has a broad range of chart styles and technical indicators to choose from. Download your free copy of StockMarketEye today and begin keeping your eye on the markets!