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The Benefit of a Stock Chart

by Erik Grywalski
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Note:  The following article is meant to help you learn from the market and does not serve as investment advice for any specific group or individual.  For more information, please read the HSR Terms of Use.

This article is simple, but helpful to new stock investors.

Most of the articles on this site include historical stock charts that help you learn from the market's history to make better decisions today.

For this resource, I wanted to quickly review the main benefit of a stock chart because there are many who think stock charts are not useful and only contain old data that isn't applicable to today.

However, this summary will get you to think about why a stock chart is a critical tool to use in your stock investing routine.

To be clear, this is not about technical analysis and only contains the main benefit of the market's technicals.

According to Dictionary.com, "technicals" are things that belong or pertain to a particular art, science or profession.

In this case, market technicals, pertain directly to the stock market's price movement (up/down) and the interest (volume) in that movement.

What's on a Stock Chart and its Main Benefit

The market's technicals (price and volume) are reflected on a stock chart of a particular company, sector or stock index.

These technicals come from decisions made all over the world and can be read in one convenient place (stock chart).

Therefore, a stock chart nicely captures the opinion of a wide array of stock investors.

This is a majority opinion and a fact from the market.

Because of this, the market's technicals are essential to get the opinion of the majority of stock investors.

Without using a stock chart, you have no way of reading the market's majority opinion.

You're basically flying blind while attempting to invest in the stock market.

Does this seem like a good idea?

Here are some important questions to consider:

1.  Would you make a stock investment decision without knowing the market's opinion beforehand?

2.  What if you like a particular stock, but the market doesn't?

The end result, you're likely to lose money/miss out on further gains if you fail to look at a chart or your opinion (minority) takes priority over the market's opinion (majority).

A stock chart tells you nothing definitive about the future, but it definitely gives you market facts about the current and past majority opinion on a stock, sector or index.

As a result, a stock chart is beneficial because it represents an efficient screening tool that will help you quickly sift through stocks in demand and those out of favor by the majority of stock investors.

When you need unbiased (objective) advice on a stock, the best place to go is a stock chart.

Takeaway Lesson

There aren't many things in life that you can succeed at when you (minority) are fighting against the crowd (majority), but this is exactly what may happen if you don't use a stock chart before investing in the stock market.

Spend some time learning what healthy and unhealthy technicals look like on a stock chart to stay on the right side of the market before investing.

Unfortunately, you're less likely to profit from the market if you're going against its main trend.

A stock chart reduces this from happening during stock market investing.

Remember, stock investing is not about an individual opinion, it's about being aligned with the market's opinion to increase the odds of making a profitable stock investing decision.

The market's opinion conveniently exists on a stock chart.

Please >>CLICK HERE<< to read Article 2.