This page explains some of the issues surrounding the actual construction of the charts.
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There are often differing opinions as to which is the correct, or best, approach.
- Holidays and weekends are excluded;
- Trading days where there is no volume for a particular stock are included on the chart;
- Indicator construction;
- Price Comparison/Price Ratio lines move;
- Free Data watermark.
Incredible Charts do not show holidays or weekends as missed days; some
charting software does. We focus on actual exchange trading days. The major
effect is in the calculation of indicators such as moving averages and the
stochastic oscillator. Including a non-trading day in the calculation of a
moving average or stochastic
oscillator is, in my opinion, misleading.
Similarly with trendlines - there are two defensible positions: (1) show every calendar day, including weekends, on the chart and draw your trendlines accordingly; or (2) show only trading days on the chart. Including holidays but excluding weekends is, in my opinion, confusing the two approaches.
It all depends on the individual trader's preferences - there are opinions both ways.
Incredible Charts focus on actual exchange trading days. For that reason, we do show trading days on a chart even if no trades took place for that particular stock. Some software does not.
This normally only affects smaller stocks with low liquidity, but occasionally trading in a larger stock is halted due to a takeover, merger, reconstruction or some other event that will have a material effect on shareholders.
All indicators constructed are compared to sample data generated by other industry-benchmark, charting software and all differences reconciled. Where the indicator is not available on other software, we set up the formula on the benchmark software and compare the results back to Incredible Charts, again reconciling any differences.
Obviously there are still occasional differences in interpretation.
Price Comparison and Price Ratio are calculated using the ratio of closing price to that of another security/index, on the first day of the chart. This means that the starting point of the Price Ratio/Comparison will vary according to the Time Period selected. The line may appear to move if you change time periods; but the slope remains the same.
The Free Data watermark is included on all free data charts.