Area chart explained
Area charts use fill underneath the price line to highlight the price changes. In trading, area charts are often used to emphasize the size of price fluctuations and help traders quickly identify the direction and strength of a trend.
CONTENTS:
What is an area chart
Area charts are a variation of standard line charts. They use similar inputs to plot the price line and have similar settings.
Area chart's main use cases vary greatly, from trend recognition to making presentations and reports with quantitative data.
The best way to understand them is by comparing area charts with standard lines. Let's move on and see how they differ and what can help you with.
Area charts vs line charts
Area charts are a variation of standard line charts only that the space underneath the price line until the X (horizontal) axis is shaded in to help you better read changes.
Area charts
- More intuitive visual interpretation
- Emphasizes values change magnitude
- May be more suited for quantities and cumulative data
- More suited for trend reports or when a significant value change matters, than lines
Line charts
- Focus more on trend, than value changes
- Require more time to interpret significant changes
- More suited for comparing multiple assets or values
Enabling the chart type
Once you are on the Supercharts, open the chart type dropdown menu on the upper toolbar, and select "Area."
Area chart settings
To make the most of the line charts, you can customize it according to your preferences and needs.
To do that, find the gear "Settings" button on the upper toolbar, and select the "Symbol" tab.
The first section, "Area," lists settings specific to this chart type:
- Price source: Choose the price you want the chart to show. By default, it is set to close price, meaning the chart will be formed with the closing prices of an asset. According to your trading style, choose the desired price:
- Open: The chart will show the opening prices
- High: Shows only the highest prices
- Low: Shows only the lowest prices
- Close: Shows only the closing prices
- (H + L)/2: Shows the average of the highest and lowest prices
- (H + L + C)/3: Shows the average of the highest, lowest, and closing prices
- (O + H + L + C)/4: Shows the average of the opening, highest, lowest, and closing prices
- Line: With this setting on, the color of the line, its thickness, and opacity can be changed according to your preferences
- Fill: Change the colors of the filled in area underneath the line and their opacity
Area charts in a nutshell
Area charts can help you easier read significant price changes and see sharp value movements. They are widely used for reports, when a clear picture is all you need to make further decisions.
Their settings help you style your charts and make unique analysis based on your analysis preferences.
You might consider learning other chart types to see the markets from various points of TradingView.
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