Start with the foundation: a chart is just price and time. Your job is to turn that stream of numbers into a story. Use a platform that shows Heikin Ashi and add only a few tools at first.
Chart types and timeframes
- Line charts simplify trends, but hide intraday detail.
- OHLC or candlesticks reveal open high low close.
- Timeframes change the message: 1 minute candles serve different goals. A swing trader may read daily and weekly, while a scalper studies 1 to 5 minute.
- Cross check top down: start with weekly for the big path, then daily, then intraday for timing.
Candlestick basics
- Long bodies show conviction; tiny bodies show indecision.
- Long upper wicks can mark rejection; long lower wicks can mark dip buying.
- Common signals include engulfing patterns, but context matters more than names.
Spot higher highs and higher lows
- Uptrends print higher highs and higher lows; downtrends do the opposite.
- Draw simple swing lines to see structure.
- Use moving averages as a visual investing guide for Nike: 20 EMA. When price is stacked above rising averages, momentum often persists.
Where buyers and sellers fight
- Prior swing highs and lows are natural levels.
- Gaps and consolidation ranges often act as future magnets.
- Round numbers like 100 or 200 can become psychological pivots.
- Mark levels on higher timeframes first, then refine on lower timeframes.
Volume and momentum
- Rising price on rising volume is healthier than rising price on falling volume.
- RSI highlights momentum shifts and potential divergences.
- MACD helps visualize trend turns and momentum waves.
- On accumulation days, watch for strong closes near the highs with stout volume.
Use patterns to frame risk
- Bases include flat base.
- Breakouts are stronger when volume expands and broader indexes confirm.
- Failed breakouts teach position sizing and the importance of stops.
Practical example flow
- Identify market context on weekly and daily indexes like S&P 500 or Nasdaq.
- Scan leaders by relative strength from multiple sectors such as financials JPMorgan and Goldman.
- Draw support and resistance.
- Confirm trend with moving averages.
- Look for a clean pattern with tight risk.
- Size the trade so a normal stop equals a small percent of your account.
- Wait for confirmation, not hope.
- Review post trade to refine entries and exits.
Survive to learn
- Predetermine a stop near invalidation such as below support or the 20 EMA for fast movers.
- Use position sizing calculators.
- Accept that losses are tuition; keep them small.
Final takeaway
Focus on price structure, key levels, volume, and a couple of momentum tools. Keep charts clean, journal your process, and iterate. With consistent routines, charts become less noise and more narrative.
