How to read stock chart
with more stock market indicators
Use this tool to have good
readable stock price chart
in best stock chart software
Question "How to read stock charts" is answered simply from my side. When I receive such question I reply every time, that simple stock price charts are readable much easily than long term stock charts or short term stock charts with many indicators. I have noticed that many stock market traders but also stock market investors tend to use stock market price charts with many stock market indicators. They think that using of some good technical analysis indicator improves results of their stock market strategy. They finish with stock market price chart that is filled by many different stock market indicators. Such charts are not good for decision making process in any stock trading strategy as trader experiences "analysis - paralysis". There are too many information provided by every technical analysis indicator on stock price chart that stock market trader or investor is not able to decide what to do. I experienced similar situation when I was in early stages of my learning about the stock market trading several years ago. I used plenty of stock market indicators and also day trading indicators on my live stock charts. But I finished in situation when I was not able to make any trade as signals generated by these stock market indicators were not synchronized.
"Use simple stock market price chart" is my free stock market advice for any stock market trader
My typical stock price chart for my stock chart analysis looks like this US stock market price chart of SP500 index.
My ETF trading strategies
are based on simple trend analysis of these charts with minimum indicators applied. As you can see there are only
candlesticks,
only two
moving averages
and
volume.
And trendlines I draw manually into such chart.
Stock price chart with more stock market indicators
I understand that sometimes it can be useful to use more technical indicators for stock chart analysis. I started to use another set of indicators for better
trade management.
I monitor ATR stop indicator. The value of this indicator helps me to manage my open trades. When I think about new value for my stop loss level I look at chart with ATR stop indicator.Here is such chart:
But this chart is not used for analysis, only for monitoring of
trailing stop level.
So I do not want to have it all in one chart. I want to have one technical stock chart for
stock chart analysis
and second for
trade management
purposes. How to handle such issue ?One possibility is to create two charts of same security in your stock chart software and then switch between them. It is possible but it is not very nice way. Some investors use some form of free stock charts available on stock market websites. There is complicated to watch more then one single stock price chart at the same time when using these online trading sites. So it is not easy to use similar stock market trading tool for reading of free stock charts as is available in best
stock market charting software.
Good stock chart software has tabs
I prefer second way how to handle this issue of "how to read stock chart and have more stock market indicators". My recommendation is to use TABS on
technical stock charts.
What are tabs ? Check this chart below. You can see special tabs for different technical stock charts. It is similar like tabs in Excel for different sheets. One tab could be for most important stock price chart. And next for stock chart analysis with additional indicators. Here is example of tabs in my stock analysis software:
All charts on this page was created by Amibroker, my preferred stock analysis software. Amibroker is very customizable stock market charting software and offers tabs for chart windows.
Test it yourself
and find how to read stock chart in this good stock market charting software.
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