Reading a chart

Turn a price chart into words you can define and test, instead of a story you tell yourself after the move already happened.

Module 22 of 26, in the stage "Your plan". 7 lessons.

Lessons

1. Support, resistance, trends and rangesDefine support, resistance and trend in a way that doesn’t rely on hindsight. 14 min.
2. Volume, and what makes a breakout believableRead volume alongside price, and see why a breakout on low volume is weaker evidence. 13 min.
3. Moving averages, RSI and MACD: what the lines calculateCalculate a simple and exponential moving average by hand, define RSI and MACD, and read them as descriptions that lag. 16 min.
4. Timeframes: why one chart says up and down at onceMatch the chart timeframe to your holding period, and use more than one timeframe without hunting for the one that agrees. 14 min.
5. Chart patterns and trendlines: a named shape is not a testTurn head-and-shoulders, flags and trendlines into rules written before the fact, or admit they cannot be written. 16 min.
6. ATR, Bollinger Bands and volatility-based stopsCalculate ATR, use it to set a stop distance, and size the position from that stop. 16 min.
7. How a chart can fool you: log scale, splits, dividends and cropped axesRead long-term charts correctly and tell a real price move from a chart setting or a corporate action. 14 min.

Concepts covered

• Support and resistance
• Trendlines
• Volume
• Breakout
• Exponential moving average (EMA)
• MACD
• Relative Strength Index (RSI)
• Simple moving average (SMA)
• Average True Range (ATR)
• Bollinger Bands
• Volatility
• Stop loss

Keep going

• Previous module: Your mindset, tax, scams and scores
• Next module: Putting it together: size, gaps, brokers and your plan
• All 26 modules and 157 lessons
• Open the first lesson in the course

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