Read the chart before the news
Candles. The same four prices as a bar, with the open-to-close range filled in so the direction of each period is obvious.
Illustrative shapes · not market data
Four prices, one shape
Every candle answers the same four questions about its period: where did price start, how high and how low did it go, and where did it finish?
Closed above its open
The thick body spans the open and the close. The thin wicks show how far price travelled beyond them before coming back. A long wick means a move was rejected; a long body means one side stayed in control.
- Body
- Open to close
- Upper wick
- Close or open up to the high
- Lower wick
- Open or close down to the low
- Colour
- Green: finished higher
Which way is the staircase going?
Ignore single candles and look at the turning points. The order of the highs and lows tells you the trend.
Uptrend
Higher highs and higher lows
Each push reaches further than the last and each pullback stops earlier. Buyers are in control for as long as that sequence holds.
Downtrend
Lower highs and lower lows
The mirror image. Rallies fail earlier each time and every drop goes further. Sellers are in control.
Range
Highs and lows at similar levels
Neither side wins. Price moves between a floor and a ceiling until one of them finally gives way.
Floors, ceilings and the break
Support
A price area where falls have stopped before. Buyers have shown up there, so traders watch it for them to show up again.
Resistance
A price area where rises have stopped before. The more often it has held, the more attention it gets.
Breakout
When price finally closes beyond a level. Old resistance often turns into new support, but false breaks are common, which is why stops exist.
Illustrative shapes · not market data
Shapes that keep turning up
Patterns are shorthand for a tug of war that has played out many times. They describe a setup; they do not guarantee the ending.
Double top
Two failed attempts at the same high. The pattern is only complete if price then falls through the low between them.
Head and shoulders
A high, a higher high, then a lower high. The line under the two dips is the neckline; a break below it completes the shape.
Ascending triangle
A flat ceiling tested again and again while the lows keep rising. Pressure builds toward the level.
Flag
A sharp move, then a short, shallow drift against it. Often a pause before the earlier direction resumes, though not always.
Same market, six zoom levels
The terminal draws six timeframes. A trend on one can be a pullback on the next one up, so check the larger picture before acting on the smaller.
One daily candle and the six four-hour candles inside it: the same open, the same close, the same high and low, with more of the story visible.
Entries and exits, noise included
Intraday swings
The shape of a session
The trend within the day
Multi-day structure
The big picture
Chart analysis describes probabilities, not certainties. Every level breaks eventually and every pattern fails some of the time. Past price behaviour is not a reliable indicator of future results.
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