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Submitted to:
Miss Manpreet Kaur,
Lecturer, L.P.U
Submitted by:
Deepika Sethi
Roll No. :1
7450070045
Volume-Price chart
A horizontal histogram plotted on the chart of a security, which corresponds to the
volume of shares traded at a specific price level. Price by volume histograms are
found on the Y-axis and are used by technical traders to predict areas of
support and resistance. Large price by volume bars are used to illustrate high
buying and selling interest, and they are often regarded as a sign that the given
price level will act as a strong area of support or resistance. It is common to see the
price of an asset face little resistance when traveling between levels that have small
PBV bars, but pushing the price past areas with large PBV bars is substantially more
difficult.The only time volume is useful is when you combine it with price. For
example:
Expansion of range and high volume - If a stock is drifting along sideways in a
narrow range and all of sudden it breaks to the upside with an increase in range and
volume, then we can conclude that there is increased interest in the stock and it will
probably continue higher.
Narrow range and high volume - If a stock has very high volume for today but
the range is narrow then this is called churning. In this case, significant
accumulation or distribution is taking place.The length of each bar is determined by
the cumulative total of all volume bars for the periods during which the closing price
fell within the vertical range of the histogram bar. Example -
Candlestick chart is a style of bar-chart used primarily to describe price
movements of a security, derivative, or currency over time.
Formation
Candlesticks are usually composed of the body (black or white), and an upper and a
lower shadow the area between the open and the close is called the real body,
price excursions above and below the realbody are called shadows. The wick
illustrates the highest and lowest traded prices of a security during the time interval
represented. The body illustrates the opening and closing trades. If the security
closed higher than it opened, the body is white or unfilled, with the opening price at
the bottom of the body and the closing price at the top. If the security closed lower
than it opened, the body is black, with the opening price at the top and the closing
price at the bottom.
A candlestick need not have either a body or a wick.In order to create a candlestick
chart, you must have a data set that contains open, high, low and close values for
each time period you want to display. The hollow or filled portion of the candlestick
is called "the body" (also referred to as "the real body"). The long thin lines above
and below the body represent the high/low range and are called "shadows" (also
referred to as "wicks" and "tails"). The high is marked by the top of the upper
shadow and the low by the bottom of the lower shadow. If the stock closes higher
than its opening price, a hollow candlestick is drawn with the bottom of the body
representing the opening price and the top of the body representing the closing
price. If the stock closes lower than its opening price, a filled candlestick is drawn
with the top of the body representing the opening price and the bottom of the body
representing the closing price.
Compared to traditional bar charts, many traders consider candlestick charts more
visually appealing and easier to interpret. Each candlestick provides an easy-to-
decipher picture of price action. Immediately a trader can see compare the
relationship between the open and close as well as the high and low. The
relationship between the open and close is considered vital information and forms
the essence of candlesticks. Hollow candlesticks, where the close is greater than the
open, indicate buying pressure. Filled candlesticks, where the close is less than the
open, indicate selling pressure.