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How to read stock charts for beginners?


John Aaby

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You can start by learning about existing chart patterns and basic price action. Begin by observing charts and their behaviors.

Not every move has significant meaning.

Our aim is to catch momentum. You can start by observing charts when a stock had moved in a trend and look for repeating patterns.

You can also read this related topic.

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Hello John, thanks for posing this question!

Stock chart reading might prove challenging and confusing for inexperienced stock traders. It is full of lines and data that at first sight might seem too complicated, but the truth is that they are really simple, once you get the hold of them.

The first things that you see are price and area volumes and these two together provide data about a stock that are the most important such as what is the value of a stock, and how has that value changed over time.

Moving average lines provides insight into the situation of a stock and tells you whether that stock is rapidly sold or bought. 

Relative strength lines tell you how well your stock is doing compared to the S&P 500. Both of these lines are measures of a stock’s performance, with the first one showing if it is lucrative  and attracting new investors, while the latter reflects this claim on a larger scale through its ranking.

So, in conclusion it is necessary to gather knowledge which is given through stock charts and utilize this knowledge in such a way that will provide profit.
 

 

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