Reading stock charts

A chart is a visual record of how a market price changed through time. It does not explain the future; it organises past and present information so that trend, volatility and trading activity can be examined.

Candles

A candlestick usually shows the opening, high, low and closing price for one period. Daily candles describe one trading day; hourly or four-hour candles divide activity into shorter periods.

Volume

Volume measures how much trading occurred. Analysts often compare current volume with normal activity because a price move accompanied by unusually high participation may contain different information from one occurring on very light volume.

Trend and moving averages

Moving averages smooth price data. Shorter averages react more quickly while longer averages describe broader direction. Their usefulness comes from providing context, not from predicting prices by themselves.

Support and resistance

These terms describe areas where buying or selling has repeatedly become more active. They should be thought of as zones rather than exact permanent prices.

Charts are strongest when used with context: company information, market conditions, liquidity and the timeframe being studied.