Candlestick Charting For Dummies®

A Single Chart Doesn’t Tell a Whole Story

Multiple factors affect the prices of securities, from the health of the overall economy to industry-specific concerns to individual company events. And a multitude of individuals trade specific stocks daily, all with a variety of goals and time frames.

One solitary chart can’t provide insight into what all the various players and influences are hoping to accomplish as they buy and trade a security over a period of time. Keep this in mind as you develop your trading strategy, and be sure to look at charts with time frames that don’t necessarily match up exactly with the time line you use for your trades.

For example, you may be looking for a trade that lasts two or three days — a pretty short time frame. It certainly doesn’t hurt to look at charts with a longer time frame as you search for a good environment for your trade. It may be a little confidence booster if you believe some traders with a longer time horizon are going to be on the same side as you! It’s well worth the small amount of extra time and effort you spend to retrieve and study the additional chart.