At the simplest level, a chart can provide a quick snapshot of a market’s current or historical behaviour. This will tell you if it has generally been moving upward or downward, has been volatile or flat, or has spiked in response to any news events.
However, charts can also be used for much more detailed analysis – known as technical analysis – and can offer various helpful features to support spread bettors who use this method.
What features to look for in spread betting charts
Charts can provide a snapshot of a market's behaviour, or support detailed technical analysis
The best spread betting providers will offer a range of charts to cover both your basic and more technical needs.
Sometimes, particularly when you’re new to spread betting, you might simply want a quick, clear and uncomplicated way to view market movements. As you progress to more advanced dealing, however, you might need detailed charts with sophisticated analysis tools and charting software.
Here are some of the key features to look out for:
True real-time charts
Markets can change direction rapidly, so out-of-date information can quickly become misleading. A chart that shows live prices will give you a more precise view of the current situation on which to base your decisions.
You may not always be within reach of a desktop computer when you need to refer to charts, so it’s important to check that your spread betting provider offers a full charting package on mobile devices.
Technical analysis – forecasting future price movements by interpreting past price data and chart features – is a very popular spread betting strategy.
Technical indicators are a key part of this. They work by applying calculations and formulas to price data, then presenting this information in a meaningful, visual form.
For example, a moving average is a line on a chart representing average prices over a period of days. This smooths out short-term volatility, giving you a clearer picture of the market’s overall movement. You can see this in the illustration below, where the red and green lines are the 100-day and 200-day moving averages respectively – two commonly used time periods.
Look for a spread betting provider whose charts offer a good range of different technical indicators. Moving average, exponential moving average, MACD, RSI, standard deviation, stochastic and Bollinger bands are all frequently used by spread bettors, and there are many more available still.
Customisation and annotation
Look for a chart package that includes tools for making your own notes and drawing lines on the charts. For example, you might want to draw a straight line between successive peaks or troughs to assess whether a market appears to be in an upward or downward trend.
You may also be able to adjust the chart layouts, colours and other features to present the information in a way that works best for you.
Dealing from charts
Sometimes you need to act fast when an opportunity presents itself, so look for charts that include dealing tools. It helps if everything you need is in one place, enabling you to open bets, attach stops and set limits directly from your charts.
Macroeconomic data releases or company earnings reports can trigger market volatility, so it’s important to know when an event that might affect your positions is coming up.
Some spread betting charts display an integrated calendar of scheduled releases, and you can use this to both plan for upcoming releases and look back at the impact of previous similar events.
It’s often useful to look at two or more related markets on a single chart, to see how their movements correspond or differ. Look for charts that enable you to compare a number of markets simultaneously.
Alerts and pattern recognition
Some spread betting providers include an alerts system based on technical indicators in their charts. Alerts can be triggered when certain criteria of your choice are met, such as a significant pattern or trend forming in the chart. These can be chosen from a selection set by your provider, or designed and built by you.
This is a useful way to test a potential spread betting strategy by simulating it over a historical period. We discuss backtesting further when we cover automated spread betting.
Your charting package should normally give you all the essentials free of charge. You may need to pay a fee to use more advanced charting software.
Learning to analyse charts
Chart analysis is a large and sometimes complex subject, but one that’s extremely popular with spread bettors. Technical analysis can help you forecast market movements and identify potential opportunities, and it provides a structured approach that appeals to many people.
For this reason, many providers offer seminars, webinars and articles that cover technical analysis techniques. These will give you practical advice and help you get the most out of your spread betting charts.
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