Grow your business, income, & life.

Behind-the-scenes training to grow your business and generating income. Strategies and mindsets that work.

How to Read Stock Charts for Beginners w/ Simple Examples Ep 202

A Line Chart

This chart right here is a chart of Apple. We have price usually on the right or left axis, and then you have the time axis that’s on the bottom.

This chart is a more extended data chart – from 2010 all the way to about mid-2018.

If you take a look at the current price, you line up today’s date with the price. That’ll give you about 218.28 for the Apple chart.

If you want to go back in time and see well what was a price at the beginning of 2016, you take a look go straight up to 2016, draw that line across and you can see the price was right around about $100 per share.

There are different types of charts out there in the stock market. You can look at data in all sorts of different ways.

We have an Area Chart

Very similar to what you saw before. It’s just that things underneath are filled in.

A Candlestick Chart

This is the standard chart that is used in the market or what most traders and investors look at. That is because it gives you more data or signals.

What it does is it tells you in every single one of these bars the high, the low, and the open, and close. The way that it wiggled around throughout that period.

This is actually if we look at this, it is a monthly candle. So every single one of these is a month, tells you the lows, the highs, and where it opened and closed within that month or period.

That way you’re not just getting a dot of where the price closed at the end of the month. Instead, you get to see the magnitude of the movement of wiggle room, also within that month. That’s what it represents.

Bar Chart

The open, high, low, close chart example – this does the same thing. I find this is a little bit easier for people to digest when they’re just getting started. Because if you take a look at this bar here, you can see we opened here. We got down to a certain price level, we got up to a certain price level, and then we closed over here.

It’s an input-output model of where you start the movement, the wiggle amount, and then where it exited. That’s really what the chart looks like.

Let’s take a look at the Candlestick again

I want to share with you an example. This one is McDonald’s also a monthly period.

You can see here we’ve digested from 2012 to about 2015-2016 moving sideways and then price took off. You can see where we went from about a hundred dollars per share, moved a little bit higher and then pulled back a little bit in 2017 and then again continued to power higher into higher prices. As we got into 2017 and 2018, it’s just moving a little bit more sideways. We’re digesting the move again.

That’s how you’re looking at the chart and reading chart.

You can see periods of digestion, periods of acceleration, or movements higher. and it allows you to spot the price differences across multiple timeframes

Looking at this time frame and Tesla here, we have 2012 to 2013. You can see a digestion period at that time point. The price was right at around $30/$40 per share. After 2013, we started to get a ramp-up at prices. Price got into these highs around September/October, and we were at about 180/190 per share.

We then had a little bit of a pullback right before we got into 2014. The price bounced, and we got into higher prices of about $250 per share.

As you look at some of these swing points, which are basically where prices change directions, you can see we’re creating a support level or a support line.

In May of 2014, we’ve hit that support level of about 175. We did it also in 2015 right before May. We’ve broken beyond that support level early 2016 but then managed to get back above it and then right around late 2016, maybe December time, we’ve hit it again to hold that support level.

You can see how stock charts are convenient to see – where is that supporting price level. You can also see some resistance levels as well – where are the stocks struggling a little bit at higher prices.

Here with Tesla, you can see again around September time of 2014, and we’re hitting higher prices of about 275 where the stock struggled again in 2015 about May/June a timeframe and then also early 2017 as well. It gives you an indication here of how to look at the chart and read the chart.

Final Word

In simple terms, you got a price on one of the sides, usually the left or right axes there, and then you have time on the bottom side. Then combining these, it allows you to match up the time with the price, and that’ll give you an indication of what the price was at a certain period.

If you’re looking at bars or candlesticks, it allows you to see how much wiggle room was there for that period. For example, a month or you could do this also on a daily basis.

If we’re looking at Amazon on this chart, you can see right now we’re on the monthly timeframe, but I could change it to a weekly. Now, you’re seeing Bar is a week or on the day, how much wiggle room was happening in the day period.

Join other stock who get a trading edge each week with our newsletter

Get our free stock market tip, video reviews, and exclusive announcements.

No spam, no gimmicks, no junk - Unsubscribe anytime

I'M SASHA.

Thanks for joining me on my trading website where I share with you about trading stocks and options.

DOWNLOAD 100 Stock trading tips Book

Ready to check out some of our best-selling books that can help you become a better and more profitable trader? Check them out by clicking the link below… 

Video recaps on the recent market trends

Summary of recent market activity looking at swing chart opportunities, potential setups, and technicals.

Stock market picture charts annotated

Quickly review screen captured stock charts with annotations. Includes support, resistance, ABCD patterns, and possible breakouts.

want some helpful advice?

Pay-Per-Minute Coaching

I am scheduling helpful coaching sessions for people who are interested in real-world advice & guidance where you only pay per session. No long term commitment required.

This website and content is for information purposes only as Rise2Learn, TradersFly, and Sasha Evdakov are NOT registered as a securities broker-dealer nor an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Rise2Learn, TradersFly, and Sasha Evdakov cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Rise2Learn, TradersFly, and Sasha Evdakov in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Rise2Learn, TradersFly, and Sasha Evdakov accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Ready to Learn Profitable Strategies to Trading Stocks?

If you are serious to learn how to trade stocks more profitably, make more money, and trade with confidence...

 

Then sign up to get our free educational videos!

AWESOME!

In order for you to get your goodies and freebies you have to confirm your email address.

 

To confirm your email address, just go to your email inbox (or check your spam) and click the link that's inside the email that states you want to receive messages from us.

 

That's its!

Just one more thing... 

Ready to Get Our Educational Videos Each Week?

If you are serious to learn how to trade stocks more profitably, make more money, and trade with confidence...

 

Then sign up to get our free educational videos!

5853

AWESOME!

In order for you to get your goodies and freebies you have to confirm your email address.

 

To confirm your email address, just go to your email inbox (or check your spam) and click the link that's inside the email that states you want to receive messages from us.

 

That's its!

Just one more thing...