Stock Charting Tips for Beginners

Stock Charting for Dummies - Last Week and Next Week

The markets have been bearish recently for a variety of reasons, the euro, the Greeks, the Chinese etc... so what are they charts saying about where we are heading? First, on the SnP 1280 is a significant support line,if it goes under 1280 then we can expect it to head quite a lot further south.

However,the 'old school chartist' is quite optimistic as can be seen from this interest video below. Personally I am more negative but that may be just be negative nature and also because I'm hoping for stock prices to head lower so that I can buy them cheaper.

It is important for beginners to understand stock charts as the professionals use them to time their trades. So if you don't understand them then you are placing yourself at a disadvantage.

Chart analysis of last week and possible trend for next week


A couple of things to remember for short-term swing trading - don't buy a stock if the 5-day moving average is pointing down. And in swing trading you are looking for a profit of around 8 or 9% before selling up and moving on. It's all about risks and rewards, you need to ensure that your winners make more than your losers lose, so don't forget to sell if your trade moves down around 4%, don't hang on hoping it will bounce back, just get out and look for another one. For more details on swing trading see - swing trading tips

Stock Trading for Beginners Video

Stock Trading for Dummies Video

[UPDATE : Sunpeaks crashed 58% on the 18th - so well done and respect to Stock Trading Master for getting out when he did !! Check out the video to see why he sold]

Check out this excellent video from Stock Trading Master. It's quite long (30 minutes) but it's basically a free seminar on how to trade stocks. He sold his Sunpeaks Ventures stock for a 160% profit in 2 weeks. He explains how and why in his own inimitable style and also says why he has now moved out and got into Fonar.

He also gives some insights into his way of reading both the charts and the fundamentals of a company. If you trying to make money trading stocks then you can learn a lot from people like the stock trading master and the old school chartist who post their chart analysis free of charge on Youtube ! Isn't the Internet wonderful!? Now all we got to do is listen and learn (that's the hard part).



Further reading on charts for  dummies : http://www.howtotradestocks.co/2010/02/one-stock-trading-tip-for-beginners.html

Stock Charts for Beginners Video

Stock Charts for Dummies - See video below

NB : For the absolute basics on how to trade stocks - click here for the no-nonsense no frills lowdown ---> how to trade stocks online

Hurricane Irene has been and gone leaving a lot of damage in its wake. The damage is expected to total around $10 billion and some say it will negatively affect insurance companies, but in fact, allegedly, it is just the opposite. Large events like this one actually allow insurance companies to increase their premiums ! So long-term people see them as good. That's money for you.

Stock trading master's videos at guerillastocktrading.com and youtube are really good as an introduction to stock charts and how to trade stocks, not because they are basic stuff but because they are videos from a guy who clearly knows about stock trading and the significance of the various charts and indicators. He also explains it all in a way that beginners to stock trading can understand and follow.

He says we are still in a downtrend in the stock markets, which is good because I agree with him. We have had a slight bounce in recent days but I expect the downtrend to resume, especially given the mess that is Europe at the moment, I can't see that being cleared up anytime soon.

Bernanke is also going to speak which could spook the markets even further.

One stock that I think could do well in the long-term is Amazon, because of the rapid rise in ebook sales - want to be a best-selling author and millionaire ? Then self-publish an ebook on Amazon - here's how it is done - ebook best-sellers and here's a survey t hat shows how many people actually make money writing and publishing their own ebooks for the Kindle - http://www.ebookstore.co/how-to-make-money-writing-ebooks

Stock charts for dummies video


For further info. on how to interpret stock charts see - stock charting basics and how to trade stocks

Investing in Stocks for Beginners Charts

Investing in Stocks for Dummies - Understanding Stock Charts

If you want to make money on the stock market by trading stocks and shares and you want to do it fairly quickly then you are going to have to learn at least the basics of stock charting. Fortunately this is not too difficult to do given the many online stock charting videos that exist for free to teach new traders how to interpret stock charts. Videos are a lot easier to follow generally than books or written explanations of charting, but they do not always contain a great deal of useful information.

The following 2 videos provide an excellent introduction to investing in stocks for dummies using stock charts. They are also very easy to listen to and very clear, which cannot always be said of videos that people put on youtube ! If you are not an absolute beginner to stock charts then you may find these videos rather too easy, but for those who know very little about charting they will provide a good introduction to the basic concepts.

Basic Stock Chart Reading - An Explanation of Stock Chart Terminology


The Basics of Stock Charts - Difference between Line Charts, Bar Charts and Candlestick Charts


For slightly less basic information on charts such as how to spot chart breakouts and how to trade them see this excellent video - stock market for beginners

Home : Investing in Shares for Beginners

One Stock Trading Tip for Beginners

How to Trade Stocks Online

Lots of beginners to stock trading and the stock market feel that there is something basic they need to know to ensure they make the right decisions. Well, apart from the obvious answers like use your common sense, don't believe snake oil salesmen, a mine owner is a liar standing next to a hole in the ground etc... there is one basic thing you can do for yourself. Learn how to understand basic stock charts signals. For example one basic signal if you intend being a swing trader not a long-term buy and hold investor is "don't buy a stock if the 5 day moving average is pointing down". If you don't understand what that means then you really need to find out. 

The moving average is just the average of a stock price over a given period of time e.g. 5 days and it moves i.e. each new day is added to the end of the sequence and the first day is taken off the front. So if the price of a stock over five days is 10 - 11 - 12 - 13 - 14 then the 5-day average is 12  so a 12 is plotted on the graph/chart. If the next day the price moves up to 15 then the 5 day  average is now 11 - 12 - 13 -14 -15 divided by 5 i.e.  13

Here is the chart for Microsoft showing the 5-day moving average (in green) and the 200-day moving average (in blue)


at the moment the 5-day moving average is pointing up (but as this chart updates itself automatically it may not be pointing up when you look at it) and the stock price is above the 200 day moving average.

So it seems a fair enough short-term trade based on the moving averages. Another basic point is never buy a stock that is below its 200-day moving average, wait until it gets back above it.

There is a lot more to charts and online stock investing than this of course, but it is important to realize that the stock market professional traders use charts and if the charts seem to them to be saying it is time to sell then it would be foolish for you to start buying, there would be too many sellers selling and this would force the price down. It is therefore doubly important as a beginner to the stock market to know when the professionals are likely to be buying and selling, which means understanding a minimum about stock market charts.

This seems to me to be the one basic point that all stock traders need to understand i.e. that it may all seem random but there may be some method to the madness and if you are serious about making a living from online stock trading then you need to get to grips with the basics of stock market charts.

See these related posts for more information on charts - Stock Charts for Dummies or Stock Charting for Beginners

Home : Stock Trading Tips for Beginners

Stock Charts for Beginners

Investing Online - Technical Analysis - Stock Charts for Beginners

Stock Charts - DOW Theory
The previous post on stock charts for beginners was about the first 3 tenets of DOW theory as explained by the guys at informedtrades.com - this post is about the last 3 tenets.

Tenet 4 - The Averages Must Confirm Each Other
This means that any rise in the DOW Jones Industrial Average must be confirmed by a rise in the DOW Jones Transportation Average, the reasoning being that if manufacturing companies are making more goods and more profits then the companies in the Dow Jones Transportation Index should also be more profitable as they are shipping the goods - if there's a divergence in these two indices then this is a signal of pending change - if not then it confirms the trend. This tenet is not so relevant today as the US is now much more of a service based economy than a manufacturing based economy.

Tenet 5 Trends Must Be Confirmed by Volume
This is still very relevant today. If the change in price (up or down) is accompanied by large volume then it means lots of people are taking part

Tenent 6 Trends Exist Until Signals Prove Otherwise

"The trend is your friend until the bend at the end" Finding signals showing that a trend is coming to an end is very important and will be covered later.

According to Dow, trends exist despite "market noise". There may be moves against the trend but these are temporary and the trend should be followed until it becomes clear that it has ended. Determining that the trend has ended is of course the tricky part and technical analysts tend to disagree.

In the current context (May 2009) many people were expecting the markets to put in a bottom after the horrendous 45% slump, but people differed about just where that bottom in the markets was going to be. When the DOW reached around 6500 many people were calling for it to go a lot lower, down to 4000 ! But so far it hasn't done that, it has in fact rallied back to around 8500. Now of course we are in an uptrend but most people expect it to end and head back down, which probably explains why it conitnues to go up.

1702 was an important point on the NASDAQ, if the NASDAQ had fallen back through 1702 that would have been very bearish and a signal that the markets were headed back down, but as it turned out the Nasdaq didn't fall back through 1702 and so that is seen as being very bullish. Markets should therefore continue to head higher ! We shall see.

Technical analysis may seem arcane but investing online without some basic understanding of stock charts would be very foolish.




Home : How to Trade Stocks

Investing Online Stock Market Charts

Investing Online - Technical Analysis and DOW Theory for Beginners

How to Read Stock Market Charts

Around 1900 Charles DOW was analyzing the movements of the DOW Jones Industrial Average and the DOW Jones Transportation Index when he found that these indices tended to move in a predictable way over time.

This is considered by many to represent the beginning of technical analysis and is used by a great many experts and non-experts in stock trading.

There are 6 tenets to DOW Theory, here are the first 3 :-

1. Markets have three trends - an uptrend, a downtrend and a correction i.e. the market moves up corrects then continues to move up.
2. Trends have 3 phases - the accumulation phase (when the experts are taking positions) - the public participation phase (which leads to rapid price increases) - the last phase is the excess phase when rampant speculation catches on but the smart movement starts exiting the trend.
3. Markets discount all news so that once news is released it is generally too late, the markets have already taken it into account - so to beat the market you need to look at technical factors not fundamental factors.

See stock market charts for beginners for the remaining 3 tenents
All this is said so much better than I could say it in this video by informedtrades .com