How to read stock charts

How to read stock charts?

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Whether you are a beginner or veteran trader you need to keep things simple while reading the charts.  There are hundreds of different indicators and market timing devices.

Here are some of the top trading tools

-Moving averages

-Stochastics

-Bollinger Bands

- McClellan Oscl.

-Ichimoku

-Money flow

-Pivot points

-VWAP

-Volume

-Candlestick patterns

-Elliot wave

-Fibonacci

-NYMO

-Accum/Distr

-RSI

-Money Flow

 

And hundreds more!

 

We keep things simple by trading Rules of Engagement (ROE) based on market trend.  Most of you are looking at candle charts, while I focus on bar charts.  It is easier for me to see opening prices and close prices using simple daily bar charts.  Many of you use weighted moving average for your moving averages.  I use “simple” moving averages to keep thing simple.  Moving averages are a tool most active traders use to measure momentum. The primary difference between a simple moving average, weighted moving average, and exponential moving average is the formula used to create the average.  For a simple moving average, the formula is the sum of the data points over a given period divided by the number of periods. Weighted moving average assigns a heavier weighting to more current data points since they are more relevant than data points in the distant past. The weighted moving average is calculated by multiplying the given price by its associated weighting and totaling the values.  Also, many use Exponential moving averages to read the charts.  Exponential moving averages are also weighted toward the most recent prices, but the rate of decrease between one price and its preceding price is not consistent.  I don’t like to get to caught up in all these definitions, but rather what works.  The simple moving average works best using ROE, with Historical Chart Pattern Comparisons (HCPC).   Our next simple way to read the charts is using a momentum indicator called Moving Average Convergence Divergence (MACD).   Quite simply this indicator needs to head in the same direction of price and the market trend, to engage in a new stock trade.  Many traders want to see a MACD bull cross, or “above the zero line”, but we keep things simple.  Lastly, we use price pattern which repeats itself over time with psychology and emotions of the stock market.   We scan thousands of charts  searching for price pattern repetition we call Historical Chart Pattern Comparisons (HCPC). Some of the price patterns we trade are WV/MA/head and shoulder, bull/bear flag , break of trendlines. We have over 900 stock options that have doubled using this simple trading methodology of ROE with HCPC.  You can use ROE on any time frame, as many active subscribers are  now using 5 -minute charts to day trade .  The most important thing with trading is risk management.  Always define your risk before every trade.  Fitzstock Charts identifies the trend, scans the charts searching for pattern repetitions, and then implements ROE using calculated entries with defined risk. All  new  trade setups are listed on our daily Engagement Spreadsheet Focus List (ESFL). Trading is NOT easy, but we have a clear cut trading edge using Rules of Engagement.

 

I have listed below where our latest 27+ day UPTREND started

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and here are the top performing trades in 2019 using ROE with HCPC

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If you are under performing the stock market with your trades and investments, it is never too late to upgrade.

I look forward to helping you reach all you trading and investment goals.

David Patrick

Fitzstock Charts, LLC

www.fitzstock.com