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Read charts with context

Follow these articles in order, or open any explanation on its own. Each step includes examples and a question to check your understanding.

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  1. Step 1 · Concept explained

    How to Read a Price Chart

    A price chart arranges observations over time. Read the instrument, interval, session, price scale and adjustment settings before interpreting its shape. Line charts, OHLC bars and candlesticks summarize the same market in different ways.

  2. Step 2 · Concept explained

    How to Read a Candlestick

    A candlestick shows an interval’s open, high, low and close. The body spans the open and close; wicks reach the high and low. Read the platform’s color convention and the interval before interpreting the candle or assigning a pattern name.

  3. Step 3 · Concept explained

    Trends, Trendlines and Channels

    Trend analysis describes the direction of a sequence of prices. Higher swing highs and lows describe an uptrend; lower ones describe a downtrend. Trendlines and channels organize selected reference points, with conclusions conditional on the interval and drawing rules.

  4. Step 4 · Concept explained

    Support and Resistance

    Support and resistance describe price areas where past declines or advances met a response. Analysts use these areas as reference points for interpreting later activity. They are observations and hypotheses about behavior, not barriers that prices must respect.

  5. Step 5 · Concept explained

    Reading Volume Alongside Price

    Trading volume counts shares or contracts exchanged during a stated interval. Reading volume alongside price adds information about activity, but volume alone does not identify investor intent, distinguish every participant or establish the direction of the next move.

  6. Step 6 · Concept explained

    Moving Averages Explained

    A moving average smooths a sequence by averaging observations over a rolling window. A simple moving average weights those observations equally. It describes past data and responds with a lag rather than revealing the future.

  7. Step 7 · Concept explained

    RSI and MACD Explained

    RSI and MACD summarize past price behavior using different calculations. RSI is a bounded momentum oscillator; MACD compares exponential moving averages. Their labels, crossings and divergences need stated settings and do not guarantee a reversal or profitable signal.

  8. Step 8 · Concept explained

    Common Chart Patterns

    Double tops and bottoms, head-and-shoulders formations, triangles and flags are names for recurring arrangements of price swings. Recognizing the arrangement is different from establishing that its traditional interpretation has predictive value.

  9. Step 9 · Concept explained

    Breakouts and False Breakouts

    A breakout is a move beyond a specified price boundary under a stated rule. A false breakout describes a move that subsequently fails under a stated failure rule. The later outcome is not known merely because the first crossing has occurred.

  10. Step 10 · Concept explained

    Doji and Spinning Tops

    A doji has an open and close that are equal or very close. A spinning top has a small body with wicks on both sides. These shapes summarize limited net movement from open to close, not certainty about the next interval.

  11. Step 11 · Concept explained

    Hammer, Hanging Man and Shooting Star

    Hammer-family and shooting-star-family candles combine a small body with one long wick. Their traditional names depend on the preceding move as well as the shape. They suggest interpretations to test; they do not establish that a reversal will follow.

  12. Step 12 · Concept explained

    Bullish and Bearish Engulfing Candles

    An engulfing pattern compares two consecutive candle bodies: the second surrounds the first in the opposite direction. Bullish and bearish labels describe traditional reversal interpretations in context. Body engulfing is different from engulfing the entire high-to-low range.

  13. Step 13 · Concept explained

    Morning and Evening Star Patterns

    Morning and evening stars are three-candle formations traditionally interpreted as reversal candidates. They combine a longer first body, a small middle body and an opposite third body that penetrates the first. Trend context, gaps and completion rules matter.

  14. Step 14 · Research method

    How to Read a Backtest

    A backtest applies a specified strategy to historical data to estimate how it would have behaved under the test’s assumptions. It is a simulation, not an actual investment record, and its credibility depends on information timing, costs and research design.