Period

When it comes to charts, the most popular time period for investors and swing traders is daily. This means that price information will be for one day. You can see how to set the periods in Figure 3-2. Common time period choices include

• Monthly
• Weekly
• Daily (shown in Figure 3-2)
• 1 Hour
• 5 Minutes
• 1 Minute

For this book, we focus on daily charts. In Chapter 8, we discuss when other time periods should be considered.

Range

Range displays how many periods you want to display, which is an important choice depending on the information you seek. Stock charts show quickly, without a lot of description, where price has been for a particular period of time. When you set the range, you know the stock’s movement for that period of time.

Some default range settings are

• 1 day
• 5 days
• 10 days
• 1 month (roughly 22 trading days)
• 3 months (25 percent of a year, 63 trading days)
• 6 months (50 percent of a year, 129 trading days)
• 12 months (one year, 258 trading days)
• 3 years
• 5 years
• 10 years
• Year to Date
• Select Start/End Date
• Fill the Chart (as shown in Figure 3-2)

Traders or investors choose a time frame based on the type of decisions they want to make. For example:

• Short-term traders select a three-month time frame most often, because they plan to exit in the same day or within a few days. The three-month time frame gives them enough information to see the trend visually, but not too much information that can make it difficult to see an exit point. These charts can be intraday to describe what is happening for the day. Using a chart with five to ten days broken into one-hour candles can show a stock starting to improve or break down.
• Investors are less concerned with intraday movements and tend to select a one-year chart so they can catch longer trends. Because they will likely hold a stock for months or years, investors want to see how the stock has done over many years rather than just a few months. When they are trying to pick an entry or exit point, long-term investors will look to monthly charts.
• Institutional investors tend to use 20-year charts with monthly time frames, but they will look at many different time frames as they make decisions for their portfolios.

The range selection has a relationship with the individual time period. Chart users will want to pair enough data to see the trend that gives them the ability to see the most recent information clearly.

Bar, gap, and extra bars

This area of the chart attributes changes automatically on StockCharts.com depending on which range you use. Set the range to Fill the Chart, so the software will calculate settings using three components. The software uses the width of each daily price bar, the space between the bars (gap), and the extra bars setting to pick the number of days to display. When you get more expertise, you may want to do your own fills, but that’s more complicated than you need to get right now. In Figure 3-2, the width of each bar is 5, and the space between the bars (the gap) is 1.

The extra bars setting is a hidden gem. This setting allows white space on the right-hand side of the chart so the last price bar is not pushed up against the side of the chart. Typically, an extra bars setting may be 5 or 10 bars. You can set this manually by putting the number of extra bars in the Extra Bars box.

Type

Type refers to the type of display for the price information. Common display types are as follows (we discuss each type of chart and how best to use it in the chapters indicated):

• Candlesticks (Chapter 4; this type is shown in Figure 3-3)
• Bar (Chapter 5)
• Line (Chapter 6)
• Area (Chapter 7)
• Performance (Chapter 12)

Size

People read charts on many different types of devices, including desktops, laptops, tablets, or phones, so the size of the chart is a personal decision based on the device you’re using to view the chart.

With the huge variety of display surfaces, individuals will want to optimize the chart to fit on the display they have. For example, for mobile phones, smaller charts are better. It makes sense to have specific lists of charts set up to browse on the various devices you use. You can set up custom settings for each of your devices to improve the percentage of the screen that your charts cover. In Figure 3-3, the size of 1024 is typical for a laptop.

Color scheme

Everyone has personal favorite colors. You can choose the colors for your chart display. Background color is the first critical choice. This parameter personalizes the chart and allows you to control the overall mood of the display. Using black or dark backgrounds for a change from traditional white space on presentation charts can grab attention. For printing your charts, white backgrounds are best. Using white with gridlines helps for printing, but various color backdrops can help make your chart your own.

If you’re sharing charts on social media, black or dark backgrounds stand out in the scrolling but are harder to read. Lightly shaded backgrounds can improve the attractiveness of the chart while still providing uniqueness.

Accessibility options on the computer are very important, and many mainstream users find that some accessibility settings help them. The same is true in charting software. Depending on the quality of your vision, certain themes for the charts may be softer on the eyes. If you have specific vision issues, we recommend trying different backgrounds from the drop-down menu. For example, people with light sensitivity may want to use dark backgrounds, while people who need a lot of brightness on the charts may choose white or light colors for the background. You can also enhance the display choices of the data in front of the background to make the information stand out. When you change the background, it is very common to alter the price display so the two parts complement each other.

You may find the wide range of drop-down menus for setting colors daunting, so initially use the default settings to get you started (as shown in Figure 3-3). As you become more familiar with charting and your personal preferences, you can start playing with the colors of the price information to help you personalize your chart.

Up color and down color

Colors can also be used to show whether the stock is moving up or down. For example, you can use green for up and red for down, or you can set them to be the same. You may choose to use gold for both up and down on a chart displaying the price of gold. We go into the merits of using different colors as we discuss different decision-making strategies throughout this book. Figure 3-4 shows blue for the up color and orange for the down color.

Opacity

Opacity allows you to darken or lighten the price bars. A setting of 1.0 (as shown in Figure 3-4) means as bright as possible. An opacity of 0.0 makes the price invisible. The opacity tool is very nice for using area charts that you commonly see on TV. The opacity options are Auto, 0.9, 0.8, 0.7, 0.6, 0.5, 0.4 0.3, 0.2, 0.1, and 0.0. Note: This feature is available only for members.

Grid

Grid lines are easy to see on the screen. The grid setting allows you to adjust the look of the grid lines as well as the darkness of the lines. Your options are

• Off
• Normal (shown in Figure 3-4)
• Dashed
• Dense
• Normal (Dark)
• Dashed (Dark)
• Dense (Dark)

Note: This feature is available only for members.

Legends

This area controls how much information is shown in the legend. You can see the legend choices at the far right after the grid choices. The legend information is the amount of information about the stock(s) in the chart and is shown at the top left of the chart. Here are the options:

• None: Removes all information
• Minimal: Shows just the ticker symbol
• Default: Includes overlays and indicator names (this setting is shown in Figure 3-4)
• Verbose: Spells out the company name instead of the ticker symbol