Want to learn how to read stock charts?
Well, we called in Bruce Kamich, our resident Chart Professor, to help you learn that and more.
Because when it comes to investing in stocks, it is important that you are able to perform your own technical analysis of some stock charts.
Technical analysis sounds wonky but it's basically financial analysis that uses patterns to identify trends and make educated predictions. And that's exactly what the Chart Professor does with his charts every day.
He walked us through four basic charts:
- Line -- The simplest chart because it only requires one piece of data: the stock's last price. So it's basically like connect the dots but leaves out important info all-time highs, etc....
- Bar -- Three prices are included here: the stock's high price, low price and its closing price of the day or week are all included in each of the individual bars line that make up this chart.
- Candlestick -- Four prices included here: the open, the high the low and the close all make up the little rectangle shape on this chart. relation to the open and the close -- if we close below the opening -- bearish and the . If we close above the open price, bullish ed or pink is bearish white is bullish --
- Point and Figure -- The oldest chart in U.S., it dates back to 1880's. A mark only is made on this chart when the stock moves a predetermined price. In the chart in this video, each X represents a 10 points move up. A 0 notes a reaction to the move.
And then talked about the three things you need to do with each of those charts:
- Pay Attention to the Trend Line
- Read Right to Left
- It's Not the News, Its How the Stock Reacts to It
So what our video above for a great introduction to using charts to make solid trading decisions.
Read more from Kamich on Real Money and learn from the best.
Check out some of the Chart Professor's other videos:
- Chart Professor: A Candlestick Graph Can Give You an Edge Over Other Traders
- Chart Professor: A Bar Graph Shows a Stock's Extremes and Gaps
- Chart Professor: How to Make Money from a Stock Line Graph