Many people who work the stock market make their trades after evaluating a stock market chart. Other people don't know how to read the charts and don't bother with them at all. Trying to read and understand a market stock chart can be a daunting task. There are words used in the stock trading that you should get familiar with. Thus, when you understand the language of trading, you are better able to understand what is going on in the market. You are able to follow particular stocks you are interested in. To understand how to trade in the stock market, you will need to know terms such as puts and calls, IPO, strike price, options, bonds, and shorts.
Puts and Calls are types of options for buying and selling. A call gives you the right to buy stock at the strike price. You only have until the expiration date to use the call option. You are not obligated to use these options. A put is the opposite of a call; you have the right to sell stock at strike price before the expiration date, but you are not obligated to. The strike price is the price of the stock option. IPO (Initial Public Offering) refers to putting stock up for sale on the public market. Options are contracts between the buyer and the seller. Bonds are debt securities, and shorts are the sale of borrowed securities.
If you know how to read a stock market chart, you can see at a glance how the stock is doing over time. For instance, you can follow stock in an oil company and watch how the value of that stock goes up and down on the chart graph. You can see how the price of oil affects stocks, and how unemployment affects the price of stocks. For the investor who understands how to read stock market charts, he/she could make very lucrative trades.
The stock market chart can help you analyze whether a stock will be a profitable investment, or if it is time to trade. It's not just rich people who work the stock market; many investors are middle class working people. You may not make a fortune in the stock market, but you could earn dividends by owning small parts of large companies. You don't have to be an expert at reading stock market charts, but it is one of the many tools to help you make good trades in the stock market.