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How To Read Stock Charts

Learning how to read stock charts can take time as there are so many points to learn.

However, if you can master stock charts, you are very likely to become a highly successful stock trader.

It is no secret that many traders lose money when trading stocks. As I have said on many occasions on this site, one of the main reasons for this is a lack of trading discipline. Another significant reason is not having a good understanding of how to trade stock charts.

I think a good place to start is to take a look at the different stock chart types. The most commonly used chart types are line charts, bar charts and candlesticks.

Next let's take a look at trading moving averages. There are three main types, a simple moving average and an exponential moving average.

Did you know that by looking at stock chart volume you can find out how liquid a particular stock is?

Do you know your Doji from your Harami? Yes I am talking about candlestick patterns. There are many common patterns including morning stars, shooting stars, evening stars and many more.

The next thing to learn is the different stock chart patterns. We look at the most reliable patterns including head and shoulders, wedges, flags and many more. Chart patterns have happened before many major stock market moves and made them possible to predict, including the stock market crash of 2008.