WEBVTT 00:00.270 --> 00:06.030 The information presented in this video is parotid by wealthy education and is for educational purposes 00:06.030 --> 00:06.770 only. 00:06.780 --> 00:13.350 Nothing in this video or this course is intended as a recommendation to BUY OR SELL ANY SECURITY. 00:13.350 --> 00:16.230 Welcome to this course on technical analysis. 00:16.230 --> 00:19.520 Today we're going to be talking about how to read a stock chart. 00:19.830 --> 00:24.230 It's important to get the basics down because we'll be using these basics throughout the course. 00:24.300 --> 00:25.720 So let's talk about stock charts. 00:25.770 --> 00:28.400 The variety of types of stock charts you can use. 00:28.500 --> 00:32.480 Now we'll be looking at some real world examples in just a moment. 00:32.580 --> 00:37.800 Some of the types include a line chart a bar chart and a candlestick chart. 00:38.730 --> 00:42.930 I'll show you the line chart and the bar chart as well as the candlestick chart with throughout the 00:42.930 --> 00:47.530 course we're going to be using candlesticks as our main charting tool. 00:47.670 --> 00:52.530 And in just a second I'll go over the graph on the left to describe how a candlestick works. 00:52.710 --> 01:01.440 A stock chart shows a daily hourly or weekly or by the minute movement of a stock and provides the open 01:01.560 --> 01:05.450 high low and close for the time period. 01:05.460 --> 01:13.380 So if you're looking at a daily chart than each bar or candlestick is going to represent one day. 01:13.380 --> 01:19.170 If you're looking at an hourly chart then each of those would represent an hour on the chart a line 01:19.170 --> 01:25.220 chart which we'll see in just a minute gives the closing price for the time period you're looking at. 01:25.230 --> 01:29.390 So if you're looking at a daily chart it will give you the closing price for the day. 01:29.520 --> 01:34.980 Charts are important because they allow you to determine if the stock is in an up trend a down trend 01:35.400 --> 01:42.540 or a consolidation pattern which basically means moving sideways between two prices. 01:42.540 --> 01:45.610 So talk a second about the candlesticks on the left. 01:45.730 --> 01:50.910 We have two types of candlesticks a red candlestick and a green candlestick. 01:50.940 --> 01:54.270 These will be the predominant candlesticks on the candlestick chart. 01:54.490 --> 02:00.790 You can have a candlestick which is neither red or green which basically means the stock opened and 02:00.790 --> 02:02.900 closed at the same price for the day. 02:03.040 --> 02:05.060 Let's talk about the design of the candlestick. 02:05.080 --> 02:08.830 You'll have a green or red body which is shown here. 02:09.070 --> 02:10.850 That's the body of the candlestick. 02:10.990 --> 02:17.330 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. 02:17.890 --> 02:19.160 Each of these is awake. 02:19.270 --> 02:27.520 So for our green candlestick the top point of the week is the high price for the stock during that time 02:27.520 --> 02:28.170 period. 02:28.330 --> 02:31.210 And for this example I'll use a daily time period. 02:31.510 --> 02:39.800 So this is the high price for the day the high part of the green body is where the stock closed for 02:39.800 --> 02:41.060 the day. 02:41.180 --> 02:49.460 The low part of the green body is where the stock opens on the day and then the low part of the wick 02:49.790 --> 02:52.410 beneath the body is a low for the day. 02:52.670 --> 02:54.850 The red candlestick is very similar. 02:54.920 --> 02:59.130 The high part of the work on top is the high for the day. 02:59.510 --> 03:08.810 Both a red candlestick the stock has opened and the body at the top of the red body and it closed for 03:08.810 --> 03:17.830 the day at the bottom part of the red body the bottom wick represents the low price for the day and 03:17.830 --> 03:20.220 we'll see candlesticks over and over on the charts. 03:20.230 --> 03:26.130 So if you're a little confused right now that's ok because we'll be going over these quite a bit. 03:26.350 --> 03:32.260 So let's take a look at a couple of stock charts where I can show you the line chart the bar chart and 03:32.260 --> 03:39.130 the candlestick chart and I'll show you what a trend looks like and a stock throughout the course we're 03:39.130 --> 03:43.560 on to use trading view dot.com to show charts. 03:43.800 --> 03:50.040 So I'll show you how trading view works and how we can look at various charts using trading and the 03:50.070 --> 03:51.470 upper left corner. 03:51.600 --> 03:53.780 We'll put in the symbol for our stock. 03:53.820 --> 04:00.060 So here we typed in B A C B A C for Bank of America. 04:00.060 --> 04:03.270 You can choose the stock from a dropdown list. 04:03.270 --> 04:06.260 The next box over gives us our time frame. 04:06.270 --> 04:13.850 So in this case we're looking at a daily chart we can look at a chart by the minute by the 15 minute 04:14.120 --> 04:19.060 45 minute hourly daily weekly and monthly. 04:19.400 --> 04:21.530 As I said here we're using a daily chart. 04:21.770 --> 04:26.480 The next box over tells us the type of chart that we're going to be looking at. 04:26.690 --> 04:35.390 So we're first going to look at a line chart and the line chart gives you the closing price for the 04:35.390 --> 04:35.940 day. 04:37.150 --> 04:44.770 If you look at the top of the chart it will tell you on the day that you're looking at what the open 04:45.670 --> 04:53.080 the OES the open is the high and the the prices are changing because as I move the cursor it's moving 04:53.080 --> 04:54.960 from day to day. 04:55.190 --> 04:58.800 The low for the day and the close for the day. 04:58.800 --> 05:02.290 So if we pick a day we'll look at the bottom of the chart. 05:02.520 --> 05:03.770 It will give us the day. 05:03.820 --> 05:14.220 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 05:14.370 --> 05:20.100 was 28 22 and the close for the day was 28 55. 05:20.130 --> 05:25.650 This will be true on all the types of charts we look at on the line chart the bar chart and the candlestick 05:25.650 --> 05:31.540 chart that it will give you the day at the bottom and the open high low and close at the top. 05:32.870 --> 05:36.850 Canalis look at a bar chart. 05:37.000 --> 05:39.680 I'm going to zoom in a little bit so we can see the bars. 05:40.000 --> 05:45.430 So if we look at the bar chart is in two different colors red or green. 05:45.430 --> 05:57.590 The red shows a down day and the green shows an up day on the left side of each bar will be the open 05:57.590 --> 06:06.060 price you'll see the horizontal bar which represents the open price on the right side is a horizontal 06:06.060 --> 06:08.400 bar that represents the closing price. 06:08.400 --> 06:15.210 Just like with candlesticks the high of the day is represented by the top of the bar chart and the low 06:15.210 --> 06:18.360 of the day is represented by the bottom of the bar chart. 06:18.570 --> 06:29.190 So on this day August 13th 2018 the stock opened at 31 0 8 which is the horizontal bar on the left. 06:29.430 --> 06:34.700 The high 31 12 which is the top of the bar. 06:34.830 --> 06:45.540 The stock closed at 34th which is the horizontal hash on the right side of the bar and the low for the 06:45.540 --> 06:50.350 day was 30 45 which is the bottom of the BART bell. 06:50.370 --> 06:52.490 Take a look at Candlestick charts. 06:55.010 --> 07:00.080 And let's look at that same day on the candlestick chart here on August 13th. 07:00.080 --> 07:01.100 Everything is the same. 07:01.100 --> 07:03.040 The open high low and close. 07:03.230 --> 07:09.470 You can see there's a very small wick at the top which represents the high of the day was a very small 07:09.470 --> 07:11.260 way on the bottom. 07:11.280 --> 07:19.590 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 07:19.590 --> 07:21.820 is the bottom of the red bottom. 07:22.020 --> 07:24.760 Let's take a look at a green candlestick. 07:24.820 --> 07:31.790 Let's look at August 30 First we'll see the stock opened at 30 88. 07:32.240 --> 07:40.170 It dropped down to a low of 30 62 it reached a high of 30 ninety five on the day and then closed at 07:40.190 --> 07:41.490 thirteen ninety three. 07:41.510 --> 07:45.680 And you can see that the close and the high are very close to each other. 07:45.740 --> 07:52.970 So there's almost no way you really have to zoom in to see a very tiny wick at the top. 07:53.010 --> 07:55.880 So that's how we read a candlestick on a chart. 07:56.010 --> 07:58.550 Now let's take a look again using Bank of America. 07:58.560 --> 08:04.080 I'm going to zoom in and we'll look at some trends in the stock at the beginning of this chart. 08:04.080 --> 08:12.540 Now in November of 2017 we have an uptrend in the stock. 08:12.700 --> 08:16.380 I'm going to draw a trend line here. 08:17.960 --> 08:23.290 So we have the stock moving up in an up trend. 08:23.380 --> 08:30.010 Then the stock moves in a consolidation pattern and I'll draw a support line and don't worry we'll talk 08:30.010 --> 08:31.420 about support and resistance. 08:31.450 --> 08:35.500 And our next video any resistance line here 08:38.600 --> 08:48.180 to basically the stock trade sideways in a consolidation pattern the stock then moves into another uptrend. 08:49.380 --> 08:49.740 Here 08:52.820 --> 08:57.350 and then this is followed by a down trend. 08:57.550 --> 09:07.020 When the stock is falling in price here so here we have a couple of different up trends at the beginning 09:07.020 --> 09:07.530 of the chart. 09:07.530 --> 09:16.080 We have an up trend as the stock moves from $26 or so to around 32 and a half a consolidation pattern 09:16.530 --> 09:22.400 as the stock moves from 30 150 to 29. 09:23.950 --> 09:28.590 The prices are all shown on the right hand side of the chart here. 09:28.710 --> 09:35.890 And as we move the mouse up and down you can see the price change. 09:35.980 --> 09:45.280 We didn't have an uptrend here again as the stock moves to run a 31 50 and 32 level and then a downtrend 09:45.370 --> 09:51.120 as the stock moves from 31 50 back down to the 26 level. 09:51.520 --> 09:57.510 So that's how we read a chart and trading view that was an example of a line chart a bar chart and a 09:57.510 --> 10:04.860 candlestick chart an up trend a consolidation pattern and a down trend and Bank of America. 10:04.950 --> 10:08.210 Thank you for watching this video on how to read a stock chart. 10:08.430 --> 10:14.280 And our next video we're going to be talking about support and resistance which are two very important 10:14.280 --> 10:16.490 concepts in technical analysis. 10:16.830 --> 10:18.730 I look forward to seeing you in the next video. 10:18.900 --> 10:19.230 Thanks.