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So i decided to play around with stock trading a little bit. In my trading the stocks will be down when they are below this dotted line on the chart, I have no idea how this is measured or what this line represents. Sometimes my stocks will be "up" relative to this line.

Is this "up" and "down" relative to the price you bought the stock at?

  • Can you tell us which website you are seeing this chart on? When you say you are playing around with stock trading, are you actually buying and selling with a service, or are you using some sort of virtual stock simulator? – Ben Miller Jan 29 '18 at 13:38
  • im using robinhood, im actually trading stocks but im not expecting to make an income or anything. – Katz_Katz_Katz Jan 29 '18 at 13:50
  • So the chart you are talking about is inside the Robinhood app? Can you post a screenshot of the chart you are asking about? – Ben Miller Jan 29 '18 at 13:51
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    "Up" and "down" are completely relative, based on the price at a given time. Let's say it's March, and a stock started the year at $10/share, was $20/share in February, and started the day at $14/share. It it is trading at $15/share at 1pm, it is up $1 for the day, down $5 for (roughly) a month, but still up $5 since the beginning of the year. – chepner Jan 29 '18 at 13:58
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    If your knowledge is presently this minimal (which is absolutely OK) I would urge you to trade only a small dollar amount of stocks. Within two years, you'll know more than anyone. And yes you'd have to include an image for anyone to know what the hell dotted line you are referring to :) there are many dotted lines in life. – Fattie Jan 30 '18 at 2:39
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First, trading stocks is inherently risky. If you would be in trouble financially should you lose everything, you should reconsider why you are trading and how much you are investing.

Alright, onto your question. This Reddit post says that the dotted line is the previous close price. Every day the line will change based on what the stock closed at the day before. This helps you track whether your investment has gone up or down since yesterday. When your stock is "up", in this scenario, it means it is currently trading above yesterday's close price.

If you are just jumping into this, I would recommend doing some research on trading stocks and how it all works. There are many ways to invest in stocks, but most investors will tell you that you should stick to a set of rules or guidelines that control your trading. These can be as simple as saying "I will sell at X time or price" or more complicated like scenario analysis using financial models. It would benefit you to at least know the different types of trading and strategies used so you can make educated guesses on stocks or make better decisions about your investments.

Hope this helps!

  • exactly what i needed to know, im conservative when it comes to money so i want to learn many details and sure things before i really start playing the stock market. Dollar cost averaging looks like a great way to go when it comes to long term investing, but in some ways long term investing scares me more than short term investing because if i just let my money sit with some investment firm without controlling it, it might end up becoming crap during the next great recession which is almost certain to happen (the recession, that is) – Katz_Katz_Katz Feb 15 '18 at 17:15

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