How To Read Stock Charts – The Ultimate Guide

Wouldn’t it be great if you could improve your investment returns by owning securities when prices are increasing and selling them before they crash?

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If you learn how to read stock charts, you might have a chance to do so.

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On the next slides, I will teach you how to read stock charts. I then provide illustrations of how to interpret them using several commonly used technical analysis tools.

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The price is represented on the vertical- or y-axis. For each trading day, there is a box that often has whiskers above and below it.

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Volume refers to the number of shares of the stock that were traded each day.

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A simple tool used by technical analysts in deciding when to buy or sell a stock is the combination of support and resistance levels.

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When a stock has been volatile or decreasing in price, it sometimes drops to approximately the same price two or more times and then starts increasing.

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Rather than looking at two low prices about the same, a resistance level is a price a stock hits more than once but doesn’t exceed.

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Bollinger bands are a refinement of support and resistance levels. They take into account recent trends and volatility in the stock price.

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How To Read Stock Charts – The Ultimate Guide

Wouldn’t it be great if you could improve your investment returns by owning securities when prices are increasing and selling them before they crash?

If you learn how to read stock charts, you might have a chance to do so.

On the next slides, I will teach you how to read stock charts. I then provide illustrations of how to interpret them using several commonly used technical analysis tools.

The price is represented on the vertical- or y-axis. For each trading day, there is a box that often has whiskers above and below it.

Price Charts

Volume refers to the number of shares of the stock that were traded each day.

Volume Charts

A simple tool used by technical analysts in deciding when to buy or sell a stock is the combination of support and resistance levels.

Support and Resistance Levels

When a stock has been volatile or decreasing in price, it sometimes drops to approximately the same price two or more times and then starts increasing.

Support Levels

Rather than looking at two low prices about the same, a resistance level is a price a stock hits more than once but doesn’t exceed.

Resistance Levels

Bollinger bands are a refinement of support and resistance levels. They take into account recent trends and volatility in the stock price.

Bollinger Bands

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