A graph that shows the past price movement of a security in which each bar or candlestick represents a day’s worth of data. Mostly, these data points are depicted by bars, candlesticks, or line charts.
A daily chart can be compared with weekly charts.
Understanding Daily Charts
Daily charts are one of the main tools used by technical traders seeking to profit from intraday price movements and longer-term trends. A daily chart may focus on the price action of a security for a single day or it can also, comprehensively, show the daily price movements of a security over a specified time frame.
More and more, candlestick charts are gaining popularity amongst traders mainly due to the ease with which they convey basic information, such as the opening and closing price, as well as the trading range for the selected period.
Candlestick formations, however, will vary based on the time used in creating the chart. Price charts can be graphed by selecting the time frame for each period. This could range from one minute to one year, though the most commonly used time frames are hour, day, week, and month. Many technical analysts may use an intra-day chart in combination with a longer-term chart for trading analysis.
Intra-day charts graph the movement of a security’s price from the time the market opens to the time it closes. Analysts can specify the candlestick display time frames they wish to view in this type of chart through their trading system’s settings. The candlestick bars will form on the chart in real time based on the designated settings. Common settings are five or ten minutes per candlestick.
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