What is a Chart? Lesson 1.4 Created by Sebastian Kunysz

What is a Chart? Lesson 1.4 Created by Sebastian Kunysz

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LESSON 1.4 WHAT IS A CHART Alright, welcome back! Now that you know how to open up your NinjaTrader and set up your first chart, let s explore what a chart actually is at its core 3

In the world of trading there are many different chart types and time frames and some charts don t even use time. Later on, in this course we will extensively get into a chart type or a bar type that doesn t use time but for now let s stick to the absolute basics and illustrate this point. A price chart can show you the movement of a contract over days, weeks, months or even years. 4

The chart you see on your screen is the ES or the S&P 500 Emini we went into some detail about that market in The Tools of The Trade video the time frame I ve selected for this illustration is the 60- minute chart. At the bottom, you can see the different days of the week, on the side you can see the prices where the contract traded at. We can see on the 23rd of January we had a low in price and we can see on the 26th of January, we had a high in price. So, 5

Different time frames, such as weekly, monthly, quarterly and yearly charts are used to analyze longer term trends in the movement of price. There are also many different types of charts: Line on Close, Open High/Low Close and various others. For the purpose of this course, we are going to stick with the candlestick chart, the one you see on your screen right now. When you load up a chart on Ninja Trader the default colors are red and green. The colors don t matter, they are just a personal preference so don t let that confuse you when you see different charts with different colors in the world of trading. Let s move forward A candlestick on our 60 -minute chart represents 60 minutes in movement of price a candlestick will have a body, a wick or a tail or both. 6

So, we are using a 60- minute chart and the hour has past, it s time for a new candle to plot. If price closes above the open, then a new candle will be green, if price closed below the open the new candle will be red. We can identify the high or low of the candle by the extreme of the candle. This is valid whether there is a wick, a body or a tail. you may quickly notice that some candles have long wicks and short wicks or long bodies or short bodies. If there is a long wick, this just means higher volatility, if there is a small body or small wick, this just means low volatility. If you are new to trading, the simplest way for me to define volatility, is just how quickly the price moves up or down. In future videos of this course we are going to learn how to spot different candle patterns and different price patterns within your chart to effectively analyze the market. If you are at all feeling lost or overwhelmed, I want to reassure you not to not to worry later on in this course we are going to be interacting with a chart in real time you will be able to work with it and watch it unfold before your eyes. And inevitably it will become clear. alright it looks like we are ready to move forward. 7

You now know how to set up your first chart, you know what a chart is, now we are going to look at what it means to go long or go short and how to place an order. Alright I will see you in the next video. 8