Reading bars is one of the most popular methods of charting and financial market analysis, second only to candlestick charting. This method is popular because the simple graphic depiction of the day’s trading makes it easy for traders to identify and predict trends. Here are the basics of reading bars.

Know the time frame. A bar may represent a day, a week, or even five minutes.

Know what the vertical length of the bar represents. Generally, the length of the vertical bar [...]

A stop-loss indicator is simply a price level at which traders should sell stock to prevent loss and maximize profit. This indicator varies from market to market and even between long and short positions. Most stop-loss indicators have what is called a ratchet mechanism, which allows the stop-loss level to move ever higher to protect any earnings.

There are several ways of calculating a stop-loss indicator, but the most common is to calculate the average range of a given market then [...]

Chart indicators are patterns or moves that a trader uses to gauge future movement in the stock market. These may be based on a stock’s opening price, closing price, or the volume of trading between the two points. Most analysts have a few favorite indicators that they particularly trust and thus rely heavily upon.

Chart indicators basically give traders that watch them an indication of the direction of prices in the future. They may indicate prices increasing, decreasing, or stagnating. Based [...]

Volume is a measure of a company’s liquidity. Basically, it is the amount of shares that get bought and sold throughout a day compared to other stocks. In general, stocks with a low volume suffer huge fluctuations, which is why many traders will traditionally avoid stocks with low volume. This is because a low volume stock can be very expensive to buy and also difficult to sell, making them difficult stocks to deal with. As you can see, tracking volume [...]

A popular saying on Wall Street that describes market sentiment is “all boats float or sink with the tide.” Market sentiment is a broad term that describes the way investors are feeling as a whole. Market sentiment can push prices higher than ever or bring them down to unprecedented lows. It has a huge effect on every single stock, so understanding and predicting it is important for traders at every level.

There are a few factors that go into creating market [...]

Identifying crowd behavior is important for anyone working with people on a mass scale, but no one as important as stock traders. It is well known that people will copy each other and move together in the same direction, but it is the science of identifying this crowd behavior that is very important in making money in the financial markets.

One of the first and foremost rules of identifying crowd behavior is that people will follow each other. Known as the [...]

Market timing is a diverse topic, but it can be summed up as making choices based on predictions of the future movement of a financial market. This usually consists of using charts to identify market trends, buying when a stock is about to move upward while selling when a stock is about to move downward. Many investors look not just at the individual stock analysis, but also at the unique aspects and history of the company or commodity in question [...]

When it comes to predicting the movement of financial markets, there is no tool as valuable as charting. Charting is basically the art of writing out the pattern of a stock price so the analyst can identify patterns and use them to predict any future movement. There are three major types of charting.

Line charts: This is the simplest type of chart. In these, the closing price of the stock is plotted on a graph, with a line connecting each interval. [...]

Trends can be defined as the course of a market, whether it is upward, downward, or even sideways. Every market, whether it is fashion or food, has trends and the financial markets are no exception. In the case of financial markets such as the stock market, trends are significant because understanding them can increase profits and decrease losses for traders and everyone with money in the market in question.

In general, there are two main trends that are noted by market [...]

Technical analysis is a way of using market data to predict the future of the stock market. Many of the principles of technical analysis have been developed over several hundred years of watching the stock market and other markets as well.

The oldest known form of technical analysis is known as candlestick analysis. Once used to predict rice prices, candlestick analysis is a method invented in the early eighteenth century. It remains one of the main methods of predicting stock prices [...]