WHY YOU SHOULD LEARN HOW TO READ STOCK CHARTS

By: Frantzo Brinvil

WHAT ARE STOCK CHARTS

Graphs that provide traders and financial analysts information about a company to know whether or not they can invest into this company.

IS READING STOCK CHARTS IMPORTANT?

Stock charts are very helpful They can help us spot the signals They can tell us when to place our orders They can tell us when to sell our shares Overall, they’re indeed important to traders

DO YOU KNOW HOW TO READ STOCK CHARTS?

It’s harder than you think

There are many things in a chart to learn

Stay with me here and you’ll learn about some of them.

SET OF QUESTIONS TO KEEP IN MIND WHILE READING STOCK CHARTS

1- What trend is it currently in?

2- What stage is it?

3- How's the volume?

4- Where's the breakout? If any.

5- Where are the supports and resistances?

KNOWING THE 4 STAGES OF STOCK CHARTS FIRST

WHAT DO THE STAGES MEAN?

Very simple as you can see– Stage 1: Baseline – Stage 2: Breakout has taken place– Stage 3: Equilibrium phase between buyers and

sellers– Stage 4: Downtrend

BREAKING DOWN THE QUESTIONS YOU NEED TO ACKNOWLEDGE

Knowing the trend:

– Not knowing this would make it impossible to trade the stock.

– It could be sideway, uptrend, or downtrend

– You always have to find in which trend it’s currently trading.

THE SECOND QUESTION TO ASK YOURSELF READING STOCK CHARTS

What stage is it?

– It’ll always be in one of the four stages

– Knowing the stage will enable you to predict what’s going to happen

– It could be very helpful

THIRD QUESTION TO ASK WHILE READING STOCK CHARTS

How’s the volume?– Stocks’ price works closely with its volume– Put it this way

The more demand you have for a product the higher its price will go

It’s the same thing for stocks

Increase in volume tends to increase the price

Knowing this fact can also be in your advantage

FOURTH QUESTION TO ASK WHILE READING STOCK CHARTS

Where’s the breakout?

– Breakouts are where traders make the most profits going long

– Resistance is broken and the trend is upward

CONCLUSION

Reading stocks charts can help making the right decisions

There’re tons of information within stock charts

You have to learn how to read them if you’ve not done so yet

CREDITS

Pictures are taken from freeimages.com/Getty Images

Picture from sixth slide: Swing-Trade-Stocks

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