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Lineal Charts
In these type of charts the prices or the evolution of the indexes are placed in the vertical axis and the time on the horizontal they represent the evolution of a security or an index of securities during a determined period of time: days, weeks or even months. The line is obtained by joining the closing prices of the security or the securities of the index in each period.
Characteristics of this type of charts:
The short term speculator will be interested in analyzing short periods (days), while the long term investor might want to study more a while the long term investor might want to study more a longer period tendency (weeks or months).
The way to operate following this type of chart analysis is denominated as filter system. In this method it is considered that the rising tendency begins when the price of an asset surpasses a determined percentage, for example, 3% in an only session.
In case that the price of an asset falls below a similar percentage, and also in an only session, it is known as a falling tendency. Short-term investors usually buy when there is a rise above 3% of the quotation and sells when there is a fall below the same percentage.