Stock Charts — Charged Alpha

🎯 Reading the Chart

Each candlestick shows four prices for one time period:

Open — where the price started
High — the highest price reached
Low — the lowest price reached
Close — where the price ended

A green candle means the price went up (close > open).
A red candle means the price went down (close < open).

The thin lines (called wicks) show the high and low. The thick body shows open and close.

🔍 Navigating the Chart

Scroll wheel to zoom in/out
Click + drag to pan left/right
Search bar (top) to look up any stock, crypto, forex pair, or index
Timeframe buttons (top) to switch between 1 min, 5 min, daily, weekly, etc.
Left toolbar has all drawing tools (lines, shapes, Fibonacci, etc.)

Tip: Start with the Daily timeframe. It filters out intraday noise and shows clearer trends — ideal for learning.

🛡 What Are They?

Support is a price level that acts like a floor — when the stock falls to this level, buyers tend to step in and push the price back up.

Resistance is a price level that acts like a ceiling — when the stock rises to this level, sellers tend to step in and push the price back down.

These levels work because many traders place buy/sell orders at the same price zones, creating self-reinforcing barriers.

✏ How to Draw Them

Drawing tools are on the left toolbar of the chart. Click any icon to select a tool, then click/drag on the chart to draw.

Select the Horizontal Line tool from the left toolbar (or press Alt+H)

Look for price levels where the chart has bounced at least 2-3 times — more bounces = stronger level

Click at that price level to place the line. It extends across the entire chart.

When support breaks, it often becomes resistance (and vice versa) — this is called role reversal

Tip: Think of support and resistance as zones, not exact prices. Price rarely hits the exact same number — it hovers around the area. Don't draw too many lines — pick only the strongest, most obvious levels.

📈 What Are Trendlines?

Trendlines show the direction price is moving over time.

Uptrend line — drawn below price, connecting swing lows (the bottom of each dip). Price makes higher lows like stairs going up.
Downtrend line — drawn above price, connecting swing highs (the top of each rally). Price makes lower highs like stairs going down.

✏ How to Draw Them

Drawing tools are on the left toolbar of the chart. Click any icon to select a tool, then click/drag on the chart to draw.

Select the Trend Line tool from the left toolbar

For an uptrend: click the first swing low, then click a second swing low. The line should slope upward.

For a downtrend: click the first swing high, then click a second swing high. The line should slope downward.

A valid trendline needs 2 touches to draw it, but 3+ touches to confirm it's reliable

Tip: Steeper trendlines break more easily. Gentler slopes tend to be more reliable. When price closes beyond the trendline (not just a wick), it may signal a trend change.

🔢 What Is Fibonacci Retracement?

Fibonacci retracement predicts where a stock might pause or reverse during a pullback. It draws horizontal lines at key percentage levels between a swing high and swing low.

23.6% — shallow pullback, very strong trend
38.2% — moderate pullback, trend still healthy
50.0% — halfway retracement (widely watched)
61.8% — the "Golden Ratio," the most important level
78.6% — deep pullback, trend may be weakening

✏ How to Use It

Drawing tools are on the left toolbar of the chart. Click any icon to select a tool, then click/drag on the chart to draw.

Select the Fib Retracement tool from the left toolbar (under Fibonacci tools)

For an uptrend pullback: click the swing low first, then drag to the swing high

For a downtrend bounce: click the swing high first, then drag to the swing low

Watch the 38.2% and 61.8% levels — these are where most reversals happen

Tip: Fibonacci levels work best when they align with other signals — like a support/resistance zone or a moving average at the same price. Never trade Fibonacci levels alone.

🕯 Key Patterns to Know

Candlestick patterns hint at what might happen next. They're most meaningful at key support or resistance levels.

─ Doji

The open and close are nearly identical — a tiny body with wicks above and below.

Meaning: Buyers and sellers fought to a tie. Indecision. Often appears at turning points.

Wait for the next candle to confirm direction.

🔨 Hammer

Small body near the top, long lower wick (2-3x the body). Appears at the bottom of a downtrend.

Meaning: Sellers pushed hard, but buyers fought back. Potential bullish reversal — price may start going up.

▲▼ Engulfing

Two candles where the second completely wraps around the first:

Bullish Engulfing: Small red candle followed by a larger green candle. Buyers took over.
Bearish Engulfing: Small green candle followed by a larger red candle. Sellers took over.

Tip: Never trade a single candlestick pattern in isolation. Always wait for the next candle to confirm the signal is real. Patterns at major support/resistance levels are far more reliable than random occurrences.

📉 Moving Averages (MA)

A moving average smooths out daily noise by showing the average closing price over a set number of days.

20-day MA — short-term trend
50-day MA — medium-term trend
200-day MA — long-term trend

Price above the MA = uptrend. Price below the MA = downtrend. MAs can also act as support/resistance.

To add: Click Indicators (top toolbar) and search for "MA" or "Moving Average"

📈 RSI (Relative Strength Index)

Measures momentum on a scale of 0 to 100. Shows whether a stock has been bought or sold too much recently.

Above 70 — Overbought. Caution, a pullback may be coming.
Below 30 — Oversold. Caution, a bounce may be coming.
50 area — neutral zone

RSI isn't a buy/sell signal alone — use it to time entries during an existing trend.

📊 MACD

Shows trend momentum — whether a trend is getting stronger or weaker.

MACD crosses above signal line = bullish (uptrend strengthening)
MACD crosses below signal line = bearish (downtrend strengthening)
The histogram bars show the distance between the lines — taller bars = stronger momentum

🎨 Bollinger Bands

Three lines: a moving average in the middle, with an upper and lower band based on volatility.

Bands widen = volatility increasing
Bands narrow ("squeeze") = low volatility, breakout may be coming
Price touching upper band may signal overbought; lower band may signal oversold

Tip: Use MACD for trend direction and RSI for timing. Together they reduce false signals. Avoid using indicators in sideways/choppy markets — they work best in trending conditions.

⏰ Choosing Your Timeframe

Each candlestick represents one time period. The timeframe you choose changes what each candle shows:

1-min, 5-min — very fast, lots of noise. For day traders only.
15-min, 1-hour — intraday trends, medium detail
Daily — one candle per day. Best for learning and swing trading.
Weekly — one candle per week. Shows the big-picture trend.
Monthly — one candle per month. Long-term investors.

🔎 Multi-Timeframe Analysis

Experienced traders use multiple timeframes together:

Weekly chart — see the big-picture trend direction

Daily chart — find zones to enter or exit

4-hour chart — fine-tune the exact timing

Tip: Start with Daily. It removes intraday noise and shows cleaner trends and patterns. Once you're comfortable, add Weekly for context and 4-Hour for precision.

📊 What Volume Tells You

Volume shows how many shares traded in a period. High volume = many participants agree on the price. Low volume = few participants, less conviction.

Price rising + volume rising = strong uptrend, many buyers
Price rising + volume falling = weak uptrend, may reverse
Price falling + volume rising = strong downtrend, heavy selling
Price falling + volume falling = weak downtrend, may bounce

⚡ Breakout Confirmation

When price breaks through support or resistance:

High volume breakout = likely real, the move should continue
Low volume breakout = possibly fake, may reverse back

The volume bars appear below the price chart. Taller bars = more activity. Compare each bar to recent average volume to gauge significance.

Tip: A healthy uptrend should have rising volume on up days and declining volume on down days. If you see the opposite, the trend may be weakening.

📌 Reversal Patterns

Head and Shoulders — Three peaks: middle is tallest (the "head"), two shorter peaks on either side (the "shoulders"). All three touch a support line (the "neckline"). Signals a bearish reversal — uptrend may be ending.

Double Top (M shape) — Price rises to a level, pulls back, rises to the same level again, then falls. Buyers tried twice and failed. Bearish.

Double Bottom (W shape) — Price falls to a level, bounces, falls to the same level again, then rises. Sellers tried twice and failed. Bullish.

🔸 Triangle Patterns

Ascending Triangle — flat upper resistance + rising lower support. Price coiling tighter. Usually breaks upward.
Descending Triangle — flat lower support + falling upper resistance. Usually breaks downward.
Symmetrical Triangle — both sides converging. Breakout direction is uncertain — watch which way it breaks.

🏁 Continuation Patterns

Flags & Pennants — After a strong move, price pauses briefly in a small rectangular (flag) or triangular (pennant) shape. This is a rest, not a reversal. The trend usually continues after the pause.

Bull Flag — slopes slightly down after an uptrend. Expect continuation up.
Bear Flag — slopes slightly up after a downtrend. Expect continuation down.

Tip: Patterns work best in strong trends and should always be confirmed with volume. A breakout from a pattern on high volume is far more reliable than one on low volume. Never enter based on the pattern alone.