Principles of successful stock chart analysis

You must prepare every day to trade stock by using a stock chart analysis. You need to look at a lot of stock charts or stock market index charts to identify what happened and what could happen during the next few days.

Predict the future? Yes! You have to use candlestick charts to find the most probable scenario, which can deliver results in the near future and to find best stock trading opportunity.

Then, you have to prepare your own stock trading setup like I do in my everyday trading.

Don’t worry. I’ll show you simple basic principles I prefer to use during chart analysis. My chart reading and trading is based on these basics:

• support and resistance levels 
• trend
• stock volume 
• chart patterns
• relative strength and how to use it practically
• stock chart time frame analysis
• bullish or bearish candlesticks
• Fibonacci retracement

Every time when you look at a chart, you have to ask if the price is near some important level of support or resistance.

These levels you can identify as horizontal price levels , but it’s not the only possible way to identify support and resistance.

These stock market analysis tools are also very helpful

• Moving averages
• Trendlines
• Retracement levels

The next important piece of information for a stock trader is to know everything about stock trends. Is your stock trending? It’s very important to know how to find the answer to this question.

You can find:

• Uptrend
• Downtrend
• Non-trend range

Another important indicator you have to take into consideration when you’re trading is volume . Stock volume analysis is a very powerful technique in the hands of a clever trader.

I use this simple technique for volume monitoring during trading day and to decide if the current level of volume is important or not.

Btw. I publish some stock charts where I use these principles in my free stock trading newsletter.

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