Popular Technical Analysis Charts

Nilesh Jain

29 Oct 2016

1. Line Chart

A single line that connects closing price of stock is called Line chart. It is the simplest type of chart. The line chart can be plotted for different time frames; hourly, daily, weekly and monthly. The advantage of line chart is that it presents a generic trend of a specific security.

Technical Analysis Charts- Line chart

Technical Analysis Charts – Line chart

2. OHLC Bar Charts:

Technical Analysis Charts- OHLC Bar Charts

Technical Analysis Charts – OHLC Bar Charts

As the name implies, bar chart consists of bars. These bars are vertical lines with the bottom representing the low price (L) and top representing the high price (H). The bars also have a horizontal dash on both the sides of the vertical line. The open price (O) is shown on the left side, while the close price (C) is on the right side. OHLC is more accurate than line charts because they show the price movement for the day. This helps traders to predict the day’s trend.

For example - if open = 47, high = 51, low = 46 and close = 50, it will be a Bullish candle represented in green as follows:

Likewise, if open = 50, high = 51, low = 46 and close = 47, it will be a Bearish candle represented in red as follows:

3. Candlestick Chart

In a candlestick chart, candles can be easily identified as bullish or bearish candle usually represented by green and red or black and white colors. The colors can be easily changed as per your convenience.

Technical Analysis Charts- Candlestick Chart

Bullish Candle:

For example- If open = 47, high = 51, low = 46 and close = 50, it will be a Bullish Candle represented in green as follows

Bearish Candle:

Likewise, if open = 50, high = 51, low = 46 and close = 47, it will be a Bearish candle represented in red as follows:

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mutual-fund

Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


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Popular Technical Analysis Charts

Nilesh Jain

29 Oct 2016

1. Line Chart

A single line that connects closing price of stock is called Line chart. It is the simplest type of chart. The line chart can be plotted for different time frames; hourly, daily, weekly and monthly. The advantage of line chart is that it presents a generic trend of a specific security.

Technical Analysis Charts- Line chart

Technical Analysis Charts – Line chart

2. OHLC Bar Charts:

Technical Analysis Charts- OHLC Bar Charts

Technical Analysis Charts – OHLC Bar Charts

As the name implies, bar chart consists of bars. These bars are vertical lines with the bottom representing the low price (L) and top representing the high price (H). The bars also have a horizontal dash on both the sides of the vertical line. The open price (O) is shown on the left side, while the close price (C) is on the right side. OHLC is more accurate than line charts because they show the price movement for the day. This helps traders to predict the day’s trend.

For example - if open = 47, high = 51, low = 46 and close = 50, it will be a Bullish candle represented in green as follows:

Likewise, if open = 50, high = 51, low = 46 and close = 47, it will be a Bearish candle represented in red as follows:

3. Candlestick Chart

In a candlestick chart, candles can be easily identified as bullish or bearish candle usually represented by green and red or black and white colors. The colors can be easily changed as per your convenience.

Technical Analysis Charts- Candlestick Chart

Bullish Candle:

For example- If open = 47, high = 51, low = 46 and close = 50, it will be a Bullish Candle represented in green as follows

Bearish Candle:

Likewise, if open = 50, high = 51, low = 46 and close = 47, it will be a Bearish candle represented in red as follows:

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