Basic Tips on Trading Stock Charts

The Basics of Stock Charts for Dummies

Take a look at this excellent video on stock charts by the Old School Chartist. It is aimed at the very beginners amongst us, so if this is not you  then you may wish to skip it. In the video he gives a very good and easily understood explanation of the wedge pattern and the difference between logarithmic charts and arithmetic charts and why it is very important to use logarithmic charts when looking at stocks. Any charting package (whether free or paid for) will allow you to switch between the two diferent charting methods just by clicking on a button.
In the video he mentions a book about charting which he recommends by Robert Edwards and John Magee Technical Analysis of Stock Trends
it costs around $60 but is well worth it, alternatively there is a cheaper charting book on the right-hand side of this page.

If you are more of a long-term investor rather than a short-term  trader then you might want to take a look at what stocks Warren Buffett has been buying - Warren Buffett's Latest Stock Buys

For more about charting see - How to Trade Stocks Online

Technical Analysis of Stock Trends


Stock Market for Beginners - Charts

Stock Market for Dummies - Stock Chart Analysis Video

Check out this video on the SnP market charts from the Old School Chartist

Basically OSC has been saying for a while now that if the SnP breaks down below a certain line around 1245 then it will be heading down another 75 - 80 points. Well, that support of around 1245 was broker yesterday (Wednesday) and it loks like we are heading for another down day today (the FTSE is down around 100 points so far today and the DOW futures are also pointing down).

For beginners to stock trading and stock charts it is very useful to see how traders with more experience interpret stock charts. Stock charts are not infallible of course, and neither are the interpretations of them, but there is a widely held belief that the news comes out in the charts first. Primarily because people in the know - generally institutional traders - place their positions before everyone else gets to join in.

This institutional trading can be seen in the charts and when the rest of the traders join in this merely accentuates a trend that was already there.

For a slightly more detailed look at charts and why professional stock and forex traders use them, check out - stock charts for beginners

For a VERY detailed explanation of charting for traders of all levels then you can download this 272-page ebook from Amazon Getting Started in Candlestick ChartingCandlestick Charts Ebook