DEFINITION of 'Daily Chart'

A line graph that displays the intraday movements of a given security. This contrasts to longer term charts, such as those that show a security’s movement over a period of days, months, or even years. Daily charts may also refer to charts that show each bar or trading session as a single day rather than a week or month.

BREAKING DOWN 'Daily Chart'

Daily charts display all of the price movements for the period. Often times, day traders use these charts to implement short-term trading strategies. The term may also refer to charts that show each bar or trading session as a single day. In these instances, daily charts may contain several months’ worth of prices with each bar or candlestick representing a single day.

In the above example, each candlestick represents a single day or trading session for the SPDR S&P 500 ETF (SPY). Note that there are about five months’ worth of trading data contained in the chart, which differentiates it from an intraday chart.

The line between days may be blurred in some markets. For example, the foreign exchange (forex) market operates 24 hours per day, which means that there is technically no stoppage of trading between one trading day and the next. The convention in these cases is to consider a single day to be 5:00 p.m. Eastern Time to 5:00 p.m. Eastern Time the next day. Most websites and applications that provide daily charts are automatically displayed this way.

[ Technical analysts use many different timeframes when analyzing potential opportunities, but it's important to know what indicators to use in each timeframe to spot attractive trades. In Investopedia's Technical Analysis Course, you will learn basic and advanced technical analysis, chart reading techniques, and technical indicators that can be used to capitalize on trading ideas in over five hours of on-demand video, exercises, and interactive content developed by a Chartered Market Technician. Check it out! ]

Multiple Time Frames of Daily Charts

Many day traders incorporate daily charts in their trading setups that span multiple time-frames. For instance, day traders may have three monitors displaying minutely, hours, and daily charts to get a more complete picture of a security’s trading action.

Day traders use daily charts as their primary source of information for the day where they scan for opportunities. They may look for key areas of support and resistance that wouldn’t necessarily show up on shorter term charts.

Hourly and by the minute charts may then be used to see a finer level of detail. Traders may look at these charts for areas of intraday support and resistance, while keeping in mind the longer-term support and resistance levels identified earlier. The downside is that these shorter-term charts tend to have more volatile price action that can make it difficult to spot trends compared to daily charts or longer-term charts that tend to be smoother.

The Bottom Line

Daily charts are line graphs that displays the intraday movements of a given security, but they may also refer to charts where bar or candlestick represents a single trading day. Many day traders use a combination of charts to get a clear picture of the trading action for a particular day with each chart showing a different perspective.

RELATED TERMS
  1. Forex Charts

    A charting package that allows a trader to view historical currency ...
  2. Bar Chart

    A style of chart used by some technical analysts, on which, as ...
  3. Box Size

    The minimum price change that must occur before the next mark ...
  4. Reversal Amount

    The amount of price movement required to shift a chart to the ...
  5. Inside Days

    A charting term used by technical analysts and day traders. Inside ...
  6. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
Related Articles
  1. Trading

    Introduction to Swing Charting

    Discover why traders use swing charts, how these charts are constructed and how to start using them.
  2. Trading

    Advantages of Data-Based Intraday Charts

    Data-based chart intervals can offer unique profit opportunities for observant market players.
  3. Trading

    The Right Way to Set Up Your Trading Screens

    Well-organized trading screens can speed up complex decision making.
  4. Financial Advisor

    Moving Average

    Learn about this basic technical indicator and how you can use it to chart the value of a security's price over a set period.
  5. Trading

    Triple Screen Trading System - Part 1

    Learn to take advantage of trend-following and oscillator techniques to analyze trading decisions.
  6. Trading

    Charts Suggest Commodities Are Poised to Have a Strong 2017

    Long-term weekly charts combined with the under followed Volume by Price indicator are pointing to higher commodity prices in 2017.
RELATED FAQS
  1. How do experienced traders identify false signals in the market?

    Learn how traders identify false signals in the market when using indicators and strategies to better identify true market ... Read Answer >>
  2. What do the different colored candlesticks mean?

    A typical candlestick chart is composed of a series of bars, known as candles, which vary in height and color. Read Answer >>
  3. How do I start using technical analysis?

    Technical analysis is a method of analyzing securities by evaluating current and historical price and/or volume activity. ... Read Answer >>
  4. Is a Slow Stochastic Effective in Day Trading?

    The good news is that most technical indicators can be adjusted to be of value to a day trader. Read Answer >>
  5. If the stock market is so volatile, why would I put money into it?

    Learn how the up and down movement of price, known as volatility, can benefit short-term investors and why long-term investors ... Read Answer >>
Hot Definitions
  1. Gross Margin

    A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. ...
  2. Inflation

    Inflation is the rate at which prices for goods and services is rising and the worth of currency is dropping.
  3. Discount Rate

    Discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from ...
  4. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  5. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  6. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
Trading Center