Reading Someone Else's Chart
A published chart carries a set of choices that are rarely stated. Establishing them is the first step in reading it, and most of them change what it appears to say.
MadStockAlerts Research · Updated August 28, 2026
What to take away
- The timeframe, scale and adjustment are choices that are usually unstated.
- The window shown determines the impression more than the data does.
- Drawings were added by someone, and their date is not visible.
- Indicator parameters are rarely labelled.
- The same data supports very different-looking charts.
MAD Academy Training Video · 0:46
Check the Axes Before the Shape
Someone else's chart carries their choices — timeframe, scale, date range, adjustment — and every one of them shapes the conclusion.
This lesson is part of a Stock Alerts + Tools plan.
The choices behind any chart
| Choice | How it changes the chart |
|---|---|
| The window | A start date chosen near a low makes any series look strong |
| Scale | Arithmetic compresses early history; logarithmic does not |
| Adjustment | Split and dividend adjustment change historical prices |
| Extended hours | Changes every high, low and gap |
| Timeframe | Determines which bar shapes exist at all |
| Indicator parameters | Rarely stated, and they decide where a signal appears |
The first row is the most powerful and the least visible. A chart beginning at a low is a different argument from the same data beginning a year earlier, and nothing on the chart indicates that the start was chosen.
Drawings carry no date
A trendline on someone else's chart looks identical whether it was drawn before the move it describes or afterwards. The date it was made is the single most informative fact about it and it is never visible.
- 1A level is drawn on a chart
- 2The chart shows price reacting to itWhich is why the chart was published
- 3Was it drawn before or afterNot observable from the chart
- 4Without that, it is a description
The checks worth making
- 1Extend the windowLook at the same security over a much longer period. Most chosen windows do not survive it.
- 2Switch the scaleA dramatic-looking long chart on an arithmetic axis frequently looks ordinary on a logarithmic one.
- 3Reproduce itIf the same drawing cannot be reconstructed from the stated rules, it was a judgement.
- 4Check the adjustmentParticularly on anything with a split or a substantial dividend history.
The first step catches most of it. A chart is an argument made by a chosen window, and extending the window is the cheapest way to see what the argument left out.
The general principle
None of this implies bad faith. Every chart requires these choices to be made, most are made without much thought, and the person publishing it is frequently unaware of how much the choices shaped it.
The corollary applies to your own charts. The same choices are being made every time one is opened, and the discipline of a fixed layout exists precisely so that they are made once rather than repeatedly and unconsciously.
The axis choices that mislead most
Beyond the window, a small number of presentational choices change the impression a chart creates without changing any data.
| Choice | Effect on the impression |
|---|---|
| A y-axis that does not start at zero | Ordinary variation looks dramatic |
| A y-axis that does start at zero | Meaningful variation looks flat, on a high-priced series |
| Two series on separate axes | The scales can be set so that any two series appear to track |
| A truncated or non-uniform x-axis | Time is distorted, which distorts every rate of change |
The third row is the most misleading and the most common in published commentary. Two series plotted on independent axes can be made to appear correlated by choosing the ranges, and the appearance is a property of the axes rather than of the data.
The check is the same as for the window: reproduce it. A relationship that survives being replotted on a single axis, or as a ratio, is a relationship; one that does not was in the presentation.