Best 5 Minute Stock Chart Studies

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In life in general, knowledge is power. In nowhere is this more true than for someone trying to make money trading stocks on the market from home. Learning how to trade stocks successfully essentially boils down to whether you have time and capital to put into the system in the first place and how good you are at interpreting and analyzing technical data. One shortcut to learning how to trade stocks is to take a stock trading course such as those from Being able to spot trends before the rest of the competition allows you to make acquisitions and sales to take advantage of market fluctuations and start generating further capital for your stock investments.

5 minute stock charts

One of the most common tools for identifying short term trends in the stock, a key strategy for beginner day traders, is the 5 minute stock chart. This takes the 6.5-hour trading day and breaks it down into 78 5 minute chunks, charting the rise and fall of a specific company or stock during those particular windows using candlesticks. The main advantage of studying a 5 minute stock chart is that you can see the short term patterns that can often be hidden by the smoother line graphs. 

Volume Weighted Average Price

One of the main reasons that the 5 minute stock chart is an important tool for anyone who wants to learn trading is that it can help amateurs to calculate the volume weighted average price (VWAP) of a give stock. The VWAP is a trading benchmark that uses stock data throughout the day to inform traders of the average price that a stock has taken based on both volume of sales and purchases and its price. It’s a useful tool to benchmark your other acquisitions by, as it tells you the overall trend for a stock’s price. If the current price is above the VWAP, you will want to take a long position, and vice versa when it’s below the VWAP. It’s a preferable to a simple moving average, which only takes into account the average price of a stock and not the volume. 

The VWAP of a stock is a one day tool; any attempts to try and create meaningful trends will fail as it resets at the start of each trading day. This is where the 5 minute stock charts come into play. You can chart it yourself by adding together the high, low and close price for each candlestick, divide that number by 3 and record your answer in a spreadsheet. Divide that number by the volume of the stock to get your VWAP reading for that minute 5 minute burst. If you do this for each 5 minute window, you’ll begin to see the trending VWAP and can make your plans accordingly.

Support and Resistance

Another use for 5 minute stock charts is to identify areas of support and resistance in the price of a stock. Understanding support and resistance levels is another of the key trading ideas that beginner traders need to understand. Simply put, support for a stock shows the lowest price the stock will get to; a baseline at which purchases will pick up as demand for the stock is seen at this favorable price. Resistance is the opposite situation where a stock maxes out a certain price due to a lack of supply. The high and low marks on the 5 minute stock chart candlesticks can help you identify support and resistance points, and you can then bet whether the stock will bounce back towards its moving average or will break through to find a new support or resistance level. The 5 minute stock charts will help give you clues as to whether the support or resistant points have been reached. 

Should you pay for 5 minute stock charts?

To begin with, you will want to use a trading website or platform that provides 5 minute stock charts as part of your overall setup. You’ll even find some places that will offer you this service for free. This can seem attractive as you’re looking to put all of your spare capital into your trading strategies. However, some of the drawbacks of free data include:

  • Single data provider – you will only get one set of data from one data provider when you choose free stock charts, which means you wont see the overall movements or those of other related stocks. 
  • Not real time – the free nature means that the data can’t be provided to you in real time, and as any amateur trader knows, timing is everything when trying to make money in day trading. 
  • Unofficial data – free stock charts are often summaries and aren’t sanctioned by the market. This means that you don’t have anyone to complain to if the data turns out to be faulty.

However, free services can help get you started, and provide you with backup data and can serve as training data as you start your day trading adventure. Fortunately, most trading websites offer both free and paid versions of their stock charts. Some of the best 5 minute stock chart studies include:

  • TradingView – TradingView is unique in that it carries social media capabilities, making it a gold mine for newbie traders as you can chat with experienced traders and get hints and tips to get your started. It also contains a strategy tester feature allowing you to test out a strategy on historical data to see how you would have performed. 
  • StockCharts – the free versions of StockCharts data is some of the most reliable out there, but you can only plot three indicators at a time. By paying for some of their premium services, you can access more in depth data analysis tools.
  • Yahoo! Finance – the key feature of Yahoo! Finance is the access to the Yahoo! News network so you can use real time information to predict incoming trends. You can also tie your brokerage account to their platform to allow you to implement trades quickly and efficiently

Wherever you go to get your 5 minute stock charts, you should also be willing to keep your own records and analysis to help you grow and develop your skills as a trader. 



Disclaimer: This content does not necessarily represent the views of IWB.


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