Basic Chart Set Ups and Chart Reading

Basic Chart Set Ups / Chart Reading

All Charts

·         Bars and Candles

·         Multiple time frames on chart

·         Keltner Channel set 2.25 ATR outside 20EMA

Intraday

·         VWAP

·         Lines for High and Low of current trading day

Daily / Weekly

·         Line showing relative strength to S&P

·         Volatility spike chart

·         3/10/16 Modified MACD (rarely)

NYSE Tick

·         Most powerful market timing tool in existence

·         Volume profile??

Basic Chart Reading

·         How do you get from tape to building charts?

·         What can a bar on a chart actually tell us?

·         Using pivot points to define important levels

·         Swing analysis as a tool to define buying and selling pressure

·         Chart is historical record of what happened on the tape

Candles / Bars

·         Every bar / candle matters

·         Every bar / candle contributes to the story in the stock and shows battle of supply and demand

·         Be aware of limitation for what you can read into bars

·         Short term intraday bars have a large and random element

·         The high and low of every bar are potential short term support and resistance

Swing Highs and lows: The building blocks of market structure

·         Swing high – Bar with lower high before and after

·         Swing Low – Bar with higher low before and after

·         Indicates exhaustion of short term buying or selling

·         Are very important levels to watch for potential support and resistance

·         Cannot define swing high or low until a bar has closed

·         Also known as pivots

Why we care about Market Structure

·         Swing analysis is one tool that can show us who is in control of a market and if their conviction is increasing or decreasing

·         Every edge we have as technical traders comes from an imbalance of buying or selling pressure

·         Consider length of current swing vs previous swings in both time and price