The information presented in this video is parotid by wealthy education and is for educational purposes
only.
Nothing in this video or this course is intended as a recommendation to BUY OR SELL ANY SECURITY.
Welcome to this course on technical analysis.
Today we're going to be talking about how to read a stock chart.
It's important to get the basics down because we'll be using these basics throughout the course.
So let's talk about stock charts.
The variety of types of stock charts you can use.
Now we'll be looking at some real world examples in just a moment.
Some of the types include a line chart a bar chart and a candlestick chart.
I'll show you the line chart and the bar chart as well as the candlestick chart with throughout the
course we're going to be using candlesticks as our main charting tool.
And in just a second I'll go over the graph on the left to describe how a candlestick works.
A stock chart shows a daily hourly or weekly or by the minute movement of a stock and provides the open
high low and close for the time period.
So if you're looking at a daily chart than each bar or candlestick is going to represent one day.
If you're looking at an hourly chart then each of those would represent an hour on the chart a line
chart which we'll see in just a minute gives the closing price for the time period you're looking at.
So if you're looking at a daily chart it will give you the closing price for the day.
Charts are important because they allow you to determine if the stock is in an up trend a down trend
or a consolidation pattern which basically means moving sideways between two prices.
So talk a second about the candlesticks on the left.
We have two types of candlesticks a red candlestick and a green candlestick.
These will be the predominant candlesticks on the candlestick chart.
You can have a candlestick which is neither red or green which basically means the stock opened and
closed at the same price for the day.
Let's talk about the design of the candlestick.
You'll have a green or red body which is shown here.
That's the body of the candlestick.
And then you'll have a wick you going to have a wick on the top and a wink on the bottom of the candle.
Each of these is awake.
So for our green candlestick the top point of the week is the high price for the stock during that time
period.
And for this example I'll use a daily time period.
So this is the high price for the day the high part of the green body is where the stock closed for
the day.
The low part of the green body is where the stock opens on the day and then the low part of the wick
beneath the body is a low for the day.
The red candlestick is very similar.
The high part of the work on top is the high for the day.
Both a red candlestick the stock has opened and the body at the top of the red body and it closed for
the day at the bottom part of the red body the bottom wick represents the low price for the day and
we'll see candlesticks over and over on the charts.
So if you're a little confused right now that's ok because we'll be going over these quite a bit.
So let's take a look at a couple of stock charts where I can show you the line chart the bar chart and
the candlestick chart and I'll show you what a trend looks like and a stock throughout the course we're
on to use trading view dot.com to show charts.
So I'll show you how trading view works and how we can look at various charts using trading and the
upper left corner.
We'll put in the symbol for our stock.
So here we typed in B A C B A C for Bank of America.
You can choose the stock from a dropdown list.
The next box over gives us our time frame.
So in this case we're looking at a daily chart we can look at a chart by the minute by the 15 minute
45 minute hourly daily weekly and monthly.
As I said here we're using a daily chart.
The next box over tells us the type of chart that we're going to be looking at.
So we're first going to look at a line chart and the line chart gives you the closing price for the
day.
If you look at the top of the chart it will tell you on the day that you're looking at what the open
the OES the open is the high and the the prices are changing because as I move the cursor it's moving
from day to day.
The low for the day and the close for the day.
So if we pick a day we'll look at the bottom of the chart.
It will give us the day.
So on July 13th of 2018 the stock opened at 28 62 the high for the day was 28 69 the low for the day
was 28 22 and the close for the day was 28 55.
This will be true on all the types of charts we look at on the line chart the bar chart and the candlestick
chart that it will give you the day at the bottom and the open high low and close at the top.
Canalis look at a bar chart.
I'm going to zoom in a little bit so we can see the bars.
So if we look at the bar chart is in two different colors red or green.
The red shows a down day and the green shows an up day on the left side of each bar will be the open
price you'll see the horizontal bar which represents the open price on the right side is a horizontal
bar that represents the closing price.
Just like with candlesticks the high of the day is represented by the top of the bar chart and the low
of the day is represented by the bottom of the bar chart.
So on this day August 13th 2018 the stock opened at 31 0 8 which is the horizontal bar on the left.
The high 31 12 which is the top of the bar.
The stock closed at 34th which is the horizontal hash on the right side of the bar and the low for the
day was 30 45 which is the bottom of the BART bell.
Take a look at Candlestick charts.
And let's look at that same day on the candlestick chart here on August 13th.
Everything is the same.
The open high low and close.
You can see there's a very small wick at the top which represents the high of the day was a very small
way on the bottom.
The stock opened at 31 to 8 as we said and that's the top of the red body and it close at 34th which
is the bottom of the red bottom.
Let's take a look at a green candlestick.
Let's look at August 30 First we'll see the stock opened at 30 88.
It dropped down to a low of 30 62 it reached a high of 30 ninety five on the day and then closed at
thirteen ninety three.
And you can see that the close and the high are very close to each other.
So there's almost no way you really have to zoom in to see a very tiny wick at the top.
So that's how we read a candlestick on a chart.
Now let's take a look again using Bank of America.
I'm going to zoom in and we'll look at some trends in the stock at the beginning of this chart.
Now in November of 2017 we have an uptrend in the stock.
I'm going to draw a trend line here.
So we have the stock moving up in an up trend.
Then the stock moves in a consolidation pattern and I'll draw a support line and don't worry we'll talk
about support and resistance.
And our next video any resistance line here
to basically the stock trade sideways in a consolidation pattern the stock then moves into another uptrend.
Here
and then this is followed by a down trend.
When the stock is falling in price here so here we have a couple of different up trends at the beginning
of the chart.
We have an up trend as the stock moves from $26 or so to around 32 and a half a consolidation pattern
as the stock moves from 30 150 to 29.
The prices are all shown on the right hand side of the chart here.
And as we move the mouse up and down you can see the price change.
We didn't have an uptrend here again as the stock moves to run a 31 50 and 32 level and then a downtrend
as the stock moves from 31 50 back down to the 26 level.
So that's how we read a chart and trading view that was an example of a line chart a bar chart and a
candlestick chart an up trend a consolidation pattern and a down trend and Bank of America.
Thank you for watching this video on how to read a stock chart.
And our next video we're going to be talking about support and resistance which are two very important
concepts in technical analysis.
I look forward to seeing you in the next video.
Thanks.