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TONI TURNER’S

TRADING SCHOOL

Series

Disclaimer

This seminar, How to Read Charts: Five Easy Steps to Chart Analysis, was prepared for educational purposes only. Its contents do not recommend, advocate or urge the buying, selling, or holding of any financial instruments.

The author expresses personal opinions in the seminar contents, herein, and will not assume any responsibility whatsoever for the actions of the attendee or person reading these contents. The author may or may not hold positions in the financial instruments discussed in this seminar content.

Trading and investing involve high levels of risk. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future performance.

Disclaimer

This presentation is provided for informational purposes only and does not constitute an endorsement by Townsend Analytics of the information and views expressed by the presenter.

Townsend Analytics does not guarantee the accuracy of or warrant any representations made in this presentation.

Townsend Analytics shall not be held liable for any inaccurate or incomplete information or for any improper or incorrect use of the information contained in this presentation.

How to Read Charts

Five Easy Stepsto Chart Analysis

TONI TURNER

…educating traders and active investors

TRADING SCHOOL Series

Today’s Seminar Objective

We’ll establish an efficient and accurate step-

by-step process for interpreting the basic

components of price charts.

This process will assist us in making

the most profitable decisions when entering,

managing and exiting our portfolio positions.

Topics Outline

1. Price Chart Styles – Why Candles Shed the Most Light

2. Cycles, Trends & Trend Lines -- Make Them Work for You

3. Support & Resistance – Your Keys to Trading and Investing Success

4. Volume Signals – They’re Priceless

5. Moving Averages – Voted “Most Reliable” Chart Indicator

6. Mastering Charts – Putting it All Together

7. Practice Makes Profits!

8. Confirm What You’ve Learned . . .

How to Read Charts

Five Easy Steps to Chart Analysis

Price Chart StylesWhy Candles Shed the Most Light

Three Basic Styles of Price Charts

Line chart

Bar chart

Candlestick chart

RealTick® graphics used with permission of Townsend Analytics, Ltd. © 1986-2008 Townsend Analytics, Ltd.

Line Chart

Bar Chart


Candlestick Charts


Why Candlestick Charts Shed

the Most Light . . .

Broadcast market’s “mood & manner”

Predict tops and bottoms of upswings/downswings

Give early trend reversal signals

Enhance money management decisions

Best used with other indicator signals

Master of candle charts: Steve Nison www.candlecharts.com

http://www.candlecharts.com/

Basic Candlestick Formations

Low = 53

Open = 54

Close = 56 Open = 56 Open &

Close = 55Shadow

Low = 53

High = 57 High = 57 High = 57

Low = 53

Close = 54

Basic Candlestick Formations

Bullish Bearish Doji Gravestone

Doji

Indecision

Candlestick Chart Examples


How to Read Charts


Cycles, Trends & Trend Lines

Make Them Work for You!

Cycles

Trends & Trend Lines

Economies of industrialized nations move in cycles. In turn, their financial markets and prices of equities that populate these capital markets also move in cycles.

Trough Trough

Peak

Four Stages of a Cycle

Stage 2

Uptrend

Higher highs

Higher lows

Stage 1

Base -- Accumulation - Horizontal

Stage 3 – Peak – Distribution- Horizontal

Stage 4

Downtrend

Lower highs

Lower lows

Stage 1 -- Base – Accumulation

Horizontal

Cycles & Trends on Daily Chart


How to Read Charts


Support & Resistance

Your Keys

to

Trading & Investing Success


Trends form from price moves interspersed with “resting periods” that create support and resistance zones.

Demand Support Buyers Supply Resistance Sellers

You can identify support & resistance zones using . . . Price Trend lines Moving averages


Price & Trend Line Support


Weekly Chart

5-minute chart




How to Read Charts


Volume Signals

They’re Priceless

Volume Signals – They’re Priceless

VOLUME ISSUES UNIQUE SIGNALS – WHY?

Volume signals act as vital decision support tools… these signals:

Alert us to trend continuations

Predict potential trend reversals

Support entry opportunities

Define the “health” of price swings

Validate exit decisions


If volume momentum matches price move, then volume “confirms” price action.

If volume momentum does not correspond with price action, that “non-confirmation” warns implied price action may fail. Called “price/volume divergence”

Volume Signals – They’re Priceless!


How to Read Charts


Moving Averages

Voted “Most Reliable” Chart Indicator

Moving Averages

Voted “Most Reliable”

Moving averages are single-line indicators we use to measure a stock’s health.

The line = the average closing price of a stock over a measured time period.

To calculate today’s 50-day moving average: add stock’s closing price for last 50 days, then divide by 50.

Moving Averages


Moving averages form reliable support and resistance zones.

When combined with other technical tools, moving averages can act as excellent decision support tools for buying, managing and selling stock positions.

Investors favor the 50-day and 200-day moving averages on daily charts.

Traders often add the 20-day moving average.

39-week MA on weekly charts = 200-day MA on daily charts.

Moving Averages



Mastering Charts

Putting It All Together

When evaluating a stock’s price chart, ask . . .

Is this stock in an uptrend, downtrend or horizontal trend?

Where is short-term / long-term support & resistance?

What story are the candles telling?

What signals are volume issuing?

Where are the 20-day, 50-day and 200-day, or 39-week moving averages in relation to price?

Or, (day trading) where is price trading in relation to intraday moving averages?

Mastering Charts

Putting It All Together


Practice Makes Profits!

Keep your list of “Mastering Chart” questions next to your computer.

Next, look at charts of all time frames and look for:1. Cycles – both partial and complete2. Uptrends only, then downtrends only. Draw trend lines,

both short and long term..3. Nearby support, longer term (farther away) support. Draw

horizontal support and resistance lines. 4. Highs and lows – and what stories the candles issued.5. Uptrends and downtrends, and their correlating volume

signals6. Uptrends and downtrends, with 20-day, 50-day and 200-day

moving averages. Note crossovers and how stocks acted after those crossovers. Repeat with weekly charts using 39-day MA, and intraday charts using 10 and 20-period MAs.

Thank you for joining us!

Look for more of Toni’s Recorded Seminars

and

Educational Products at

www.ToniTurner.com

TONI TURNER

…educating traders and active investors

welcome to tto... · mastering charts –putting it all together 7. practice makes profits! 8....

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