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A Beginner's Guide to Charting Financial Markets: A practical introduction to technical analysis for investors by Michael Kahn

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2. How To Read A Chart

This section is not about how to use charting and technical analysis but rather it is a simple introduction to what is on a chart and what to do with it. There is a lot of information packed into even the simplest of charts, but the most important can be spotted quickly with just a few guidelines. Think of this section as a Quick Start guide.

The basic parts of a chart

Most charts have a main area where prices are plotted. Some have indicators plotted in a sub-window either above or below the main area, some have supporting data plotted as an overlay on prices and, of course, some have both. Chart 2.1 is a typical arrangement of both an overlay (moving averages, in this case) and an indicator (volume).

Chart 2.1 ...

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