Technical Analysis

Periodicity

Not only can you view all those different types of charts using candlesticks etc, you can view different time frames.

This is often referred to as periodicity.

In other words, most charts you see are daily charts. Every bar or candlestick represents 1 day’s worth of trading.

You can however, vary the time frame of the chart (this is entirely dependent on your software/viewer and your data).

What this means is that when you are looking at a weekly chart for example, every bar (or candlestick) represents 1 week’s worth of trading.

So, the opening price is the opening for the week. The high price is the high however we have no idea as to the day when they high was reached (unless we change the same chart to daily), and likewise with the low. The low price is the last traded price for the week.

As a simple example, the chart below is a daily chart showing 5 day’s worth of trading data.

The same data can also be view as a weekly chart, as shown below:

The same applies to monthly charts.

It is also possible to view charts with periodicity of less than 1 day (this again is entirely dependent on your software/viewer and your data).

Many very active traders who are short term or trading derivatives will often view hourly charts or even tick by tick charts (this is where every single trade is represented on the chart).

For most people starting out trading and even those well established, daily charts are ideal, although some people will combine weekly charts with this.