Understand the main chart types and how each one highlights different parts of market behavior.
Chart reading begins with the price record itself. Before an investor can interpret patterns, trend lines, or indicators, the investor needs to understand what information a chart actually displays and what it leaves out.
This section covers the three most common stock chart types: line charts, bar charts, and candlestick charts. Each serves a different purpose. Line charts simplify trend recognition, bar charts display the full trading range for each period, and candlestick charts make day-to-day buying and selling pressure easier to see.
The practical exam point is selection. No chart type is automatically superior. The better question is which chart format best supports the decision at hand.