Investing in Philippines: Investing word of the day : Chart

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Wednesday, August 18, 2010

Investing word of the day : Chart


If you go to the PSE website and look up a stock it will lead you to the stock information page of that stock. 


To better understand this section let us define what chart means which in investing is called price chart:

(information taken from http://stockcharts.com/)



A price chart is a sequence of prices plotted over a specific time frame. In statistical terms, charts are referred to as time series plots.

On the chart, the y-axis (vertical axis) represents the price scale and the x-axis (horizontal axis) represents the time scale. Prices are plotted from left to right across the x-axis with the most recent plot being the furthest right.

While technical analysts use charts almost exclusively, the use of charts is not limited to just technical analysis. Because charts provide an easy-to-read graphical representation of a security's price movement over a specific period of time, they can also be of great benefit to fundamental analysts. A graphical historical record makes it easy to spot the effect of key events on a security's price, its performance over a period of time and whether it's trading near its highs, near its lows, or in between.  


Layman's explanation: 

A chart is a picture that an investor can see how the price of a certain stock move over a period of time. 

This is important because it is where one can see the trend. Also one can use this as basis on how a stock react to certain events in the company. Knowing this information gives you an idea how will the trend be in the next couple of days , weeks or months and thus help you in your investing decisions whether to hold, sell, or buy.

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