STA Blog

Colours, clashes and clichés: How and why use colourful charts

Plowden & Smith are an expert art and antiques conservation business in south London who I follow on LinkedIn. Tackling projects great and small, their level of expertise and willingness to share some of it is refreshing. Very recently they published a video piece on colour theory where Hugo Nathan, of art advisory firm Beaumont Nathan, picks a series of works on the subject for a fantasy exhibition he is curating.

What’s all this got to do with technical analysis, you ask. Because colour, and colour combinations, really do matter. How long have many new home owners spent agonising over dabs of paint and swatches of fabric. Yet rarely do we put as much time and thought into our chart’s colours. Too often we just stick with the default setting.

Originally this was charcoal on white graph paper, sometimes pale green squares – often used in fractional rather than decimal divisions. Always using pencil, where mistakes can be rubbed out, though some brave souls used ultra-fine black marker pens for added definition. Candlesticks like three white knights and three black crows only make sense in this colourway.

The first chart packages tended to follow the style of news vendors like Reuters and Bloomberg, with green or orange font/lines on a black background. Tiring on the eyes – there is a reason why print text is black on white – and terrible for the environment when printing on paper as so much ink is used.

Bar charts can only be in black (on white), or a bright colour on black; line charts will have as many colours as you need to differentiate each series of data. When stock brokers took to candlestick charts they insisted that up-days must be green and down-days red. Trouble is, in China red is an auspicious colour and they do things the other way round, red reserved for rallies.

I’ve often incorporated the company’s colours into my charts, just as other promotional material will stick to logos, fonts and colour schemes approved by the marketing department. Swiss bank UBS sticks to red, white and black (competing with HSBC along the way); navy and red are another popular choice.
Reuters Eikon used to have a series of pre-set colour combinations which were intended as thematic choices. With names like ‘jazzy’, ‘patchwork’ and several more, as each analytical feature was added it would follow a set series of colours intended to create a harmonious picture. ‘Patchwork’ was syrupy and grim.

Needless to say, the art expert has a lot more to say on the subject.

Posted in General, STA news, Technical Analysis Courses, Trading, Trending
Tags: , , ,
One comment on “Colours, clashes and clichés: How and why use colourful charts
  1. Michael Smyrk says:

    Another area where colour is important is Moving Averages, where colour keeps the attention focused on one length as opposed to another.

Leave a Reply

Your email address will not be published.

Disclaimer

The views and opinions expressed on the STA’s blog do not necessarily represent those of the Society of Technical Analysts (the “STA”), or of any officer, director or member of the STA. The STA makes no representations as to the accuracy, completeness, or reliability of any information on the blog or found by following any link on blog, and none of the STA, STA Administrative Services or any current or past executive board members are liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. None of the information on the STA’s blog constitutes investment advice.

Not ready to join? Stay Updated

If you want to learn more about membership and being part of the STA, sign up for our updates so we can keep in touch.

  html
  text

Monthly Meetings

The STA holds 11 monthly meetings in the City of London, including a summer and Christmas party where canapés and refreshments are served.

MORE INFO

Latest Videos

As a service to our members, many of whom are unable to attend all our monthly meetings, we have been making videos of meeting presentations for several years.

MORE INFO

STA Libraries

The STA has an extensive library of classic technical analysis texts. There are over 1000 books in the collection. It is held at the Barbican Library with a smaller...

MORE INFO

Market Technician

Latest research and news

More Info

World Class Tutors

STA Course Lecturers

More Info

Membership

Be part of something special

More Info

Blog

View latest posts

More Info