A stock chart is a visual representation of a stock’s price movements over a specific period of time. It displays data such as opening, closing, high, and low prices, often combined with trading volume. Traders use different types of charts, including line, bar, and candlestick charts, with candlestick charts being the most popular because they provide detailed insights into price action and market sentiment.

Stock charts are important because they help traders analyse trends and make informed decisions. By studying patterns and movements, traders can identify potential entry and exit points for trades. For example, a rising trendline may suggest buying opportunities, while a downward trendline may indicate selling pressure. Charts also reveal key levels of support and resistance, where prices tend to pause or reverse.

In addition, stock charts allow traders to apply technical indicators such as moving averages, relative strength index (RSI), or Bollinger Bands to gain deeper insights. These tools help measure momentum, volatility, and potential reversals.

Ultimately, stock charts are essential because they provide a clear, structured view of market behaviour. While they don’t guarantee outcomes, they give traders a valuable edge by turning raw price data into meaningful information for better decision-making.