Page 1171 - How to Make Money in Stocks Trilogy

156 HOW TO MAKE MONEY IN STOCKS—GETTING STARTED

Chart-Reading 101: What’s in a Chart?

To understand the “story” a chart reveals, we’ll cover 3 basic concepts:

• What’s the trend?
• Always check price and volume.
• Is the stock finding support or hitting resistance?

Once you understand those, all the other things on the buying and selling
checklists—chart patterns, buy points, sell signals, etc.—will fall into place.
But first, we need to answer an even more basic question: What’s in a
chart?

Basic Elements of Daily and Weekly Charts

Important: Be sure to use both daily and weekly charts. The weekly
chart helps you see longer-term trends, while the daily chart helps you pin-
point specific buy and sell signals. (Throughout this book, each chart is iden-
tified as being either weekly or daily in the top left corner.)