Stock Charts Guide
Charts are context, not a crystal ball. Use them to define risk, spot regime changes, and avoid forcing trades.
Best practice: Use charts to define where you’re wrong before you size up.
1) Candlesticks: the basics
- Body = open/close range; wicks = extremes.
- Large candles often mean high uncertainty/volatility.
- Don’t overfit to single-candle patterns.
2) Trend & levels
- Trend is higher highs/higher lows (up) or the opposite (down).
- Support/resistance are areas where supply/demand repeatedly shows up.
- Levels matter more when confirmed by volume/volatility context.
3) Volatility & risk
- Size positions so normal volatility doesn’t stop you out randomly.
- Be careful around earnings and macro events (calendar risk).
- Keep a max-loss plan before entry.
How to connect charts to workflow
- Import a watchlist → scan charts quickly → shortlist.
- Use screener filters to validate the thesis.
- Use backtesting to validate the strategy rules, not the chart “story”.