Intraday charts are helpful to the trader in understanding price movement and making informed decisions. Intraday Trading Charts are an effective way to study the stock market’s price action and to do technical analysis.
As we all know, Intraday Trading means buying and selling stocks, futures & options on the same day. This type of trading can be hazardous, especially for beginner traders. And Making money through intraday trading is a challenging job. That’s why traders use different tools and techniques to analyze the market.
There are many tools and techniques available for the trader. But in this article, I describe the seven best charts for intraday trading.
What is Intraday Charts?
An Intraday Trading chart is a tool that shows or represents the price movement of a particular stock or index.
Intraday Trading Charts provide essential data such as price and volume in different time frames. The trader can use trading charts on different time frames, for example, 5-minute charts, 15-minute charts, 30-minute charts, 1 hrs charts, daily charts, etc.
The chart for a particular time frame shows price movement for that particular time frame.
Trading Charts are essential for traders cause they help them to make buying and selling decisions by providing important data such as price and volume. Traders use many types of charts in the stock market for technical analysis. But these seven are the most used and best charts for intraday trading.
Best Charts for Intraday Trading
List of the best chart for intraday and their explanation as follows:
- Line Chart
- Candlestick Chart
- Renko Charts
- Bar Charts
- Volume Charts
- Point and Figure Chart
- Tick Chart
Line Charts are formed by joining the stock’s closing price in different time frames and then forming a line for the same, For example, Daily line charts, Weekly Line Charts, Monthly Line Charts, etc. On Line Charts, data point only represent the closing price in a particular time frame.
Line Charts are simple trading charts, and they can be used to observe long-term trends and are also helpful in identifying bullish chart patterns or bearish chart patterns (different types of chart patterns).
Line chart in technical analysis is helpful, but they have limits. Because of this limit, traders only get limited data such as closing price, but to make informed decisions, they need more data such as OPEN, HIGH, LOW, CLOSE, etc. That’s why line charts can only use for understanding ongoing trends and chart patterns.
Example of Line Chart:
Candlestick Chart is one of the best reference sources for intraday trading. Candlestick chart provide more information than line charts. And That’s why traders use them to decide entry and exit on the stock price.
Every candle includes three different parts Upper Wick, Body, and Lower Wick. And also, one candlestick includes four data points: Open, Close, High, and Low. The area between Open and Close is known as the Body.
The vertical lines above and below the Body are known as the Shadows/ Wicks. The Upper wick represents the High made by price, and the Lower wick represents the Low made by price.
Candlestick chart patterns are shown in green and red color. The green color represents a bullish candle, and the red represents a bearish candle.
There are many Candlestick patterns, for example, Bullish Engulfing, Bearish Engulfing, Doji, Hammer, Shooting Star, Hanging Man, etc. These Candlestick patterns for day trading are beneficial.
Example of Candlestick Chart:
‘Renko’ originated from the Japanese word ‘Renga,’ which means bricks.
So, Renko charts are represented by bricks, and the brick size should be specific every time it forms. A new Renko is formed when the price moves further away than the previous Renko size.
Renko charts do not show detailed price action but only highlight the ongoing trend by removing the surrounding noise.
Therefore, Renko charts are helpful in understanding trends and also to identifying support and resistance levels on the charts.
Many Renko chart strategy are available for traders, but that will need another whole article.
Example of Renko Chart:
Bar Charts are time-based charts that follow different time frames and provide data such as price and volume respected to that time frame. Open, Close, High, and Low these four points form a Bar for the specific time frame. Thus, Bar charts are also knowns as OHLC Charts.
Every bar on the chart is made of one horizontal line and two vertical lines, in which the horizontal line is used to show the High and Low of the Bar, and vertical lines are used to show the Open and Close of the Bar.
The Bar Charts are shown in green and red colors, in which green shows bullish power in the market and red shows bearish power in the market.
Bar charts are not commonly used cause, with them it’s hard to identify different trading patterns in the market.
Example of Bar Charts:
The volume Chart shows the number of shares traded for that specific period. Volume charts help to understand the sideways market and are helpful to the trader in making informed decisions. That’s why a volume chart makes it easy to trade, especially intraday trading.
As I mentioned earlier, Volume charts represent the number of shares traded in the market. So instead of taking open, high, low, and close for a precise time frame, the data is taken for a volume. Therefore, the volume of the market gets represented as a candlestick, and each candlestick represents a different volume.
Volume chart analysis makes it easy to avoid a sideways market.
Note: First 6 charts are taken from tradingview.
Example of Volume Charts:
Point and Figure Chart
The Point and Figure Chart or Figure and Point Chart are the most detailed yet efficient chart for intraday trading. The point and figure chart only focuses on significant price moves and eliminates all the surrounding noise. The chart is represented with X’s and O’s in which the X is used to show the rising price and O is used to show the falling price.
These symbols are placed in a box representing a specific time, like one day or per time frame. So a new column is made as soon as the price rise or falls further the level.
The point & figure charts are mainly used on daily time frames or above time frames only.
Example of point and figure chart:
Tick charts are based on market activity. So instead of using volumes as an indicator, tick charts use market activity, so the data shown is very different from the volume charts.
In this chart, the candlesticks are formed, and each candlestick will show open, close, high, and low for a specified number of transactions.
The number of ticks on the tick chart will depend on the market’s volatility, but the most commonly used options are 144-tick and 233-tick settings.
As we can see, multiple charting options are available to intraday traders, and they can choose whatever option they want to trade in the market.
Trading graph provide the essential data for technical analysis. And choosing the right trading graph is necessary to trade successfully in the market.
And as we know, there are two types of charts for intraday trading (time- and activity-based), and they both have unique strengths and weaknesses. So traders must choose the right and suitable one for their trading style.
These are the best chart for intraday trading, and I hope this article provides you with detailed information regarding the best charts for intraday trading.