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CCI and Williams %R
Two more oscillators. Both normalize price against a recent range, which is what almost every oscillator does, and the differences are in the arithmetic rather than in the information.
Money Flow Index
RSI with volume weighting. It is one of the few oscillators that introduces an input other than price, which is the whole of its claim.
Volume Profile
Volume plotted against price rather than against time. It answers where trading happened, which a conventional volume bar cannot.
Market Profile
A distribution of time spent at each price rather than volume. Built for a session, it describes where the market accepted a price and where it rejected one.
Elliott Wave, Assessed
A framework describing price as a nested sequence of five-wave and three-wave structures. Widely followed, and difficult to falsify in the form it is usually applied.
The Wyckoff Method, Assessed
A framework describing markets as cycles of accumulation and distribution driven by large operators. Its mechanism is plausible; its identification is retrospective.
Divergence, Across Indicators
Divergence is price making a new high or low while an indicator does not. It is the most cited observation in chart reading and one of the weakest, for a reason that follows from how indicators are built.
Relative Volume (RVOL)
Relative volume (RVOL) is a stock's volume divided by its own average volume, so 3 means three times the usual participation. It measures how unusual activity is, and says nothing about direction.
Reading a Candlestick
A candlestick shows a period's open, high, low and close. The body spans open to close and the wicks reach the extremes. Reading the body and the wicks is the highest-return skill in chart reading.
Support, Resistance and Breakouts
Support is a price area where buying has repeatedly stopped a decline; resistance is where selling has stopped an advance. A breakout is a move through one. The mechanism is order flow and memory.
Trendlines and Channels
A straight line through successive highs or lows, describing the slope of a move. Useful, and more subjective than almost anything else on a chart.
The Bull Flag
A bull flag is a continuation pattern: a sharp advance (the pole) followed by a shallow, orderly pullback (the flag). Its defining quality is what the pullback does not do.
The Flat Base
A tight sideways range that holds after an advance rather than giving it back. Its virtue is that it is boring, which is exactly what makes it informative.
The Cup and Handle
A cup and handle is a rounded recovery back to a prior high, followed by a small drift (the handle) before that high is tested. The shape describes a supply problem being worked through.
The Ascending Triangle
An ascending triangle is a flat ceiling met by a rising series of lows. Buyers pay up earlier each time while a fixed supply sits overhead, and the narrowing space means the shape has to resolve.
Volatility Contraction
A volatility contraction pattern (VCP) is a series of successively shallower pullbacks, each on lighter volume. It is less a shape than a process, and the process is supply being absorbed.
Double Bottoms and Double Tops
A double bottom is two lows at about the same price with a rally between them, confirmed only when price clears that rally's high. A double top is the mirror image.
Head and Shoulders
Head and shoulders is a reversal pattern of three peaks, the middle one highest, measured against the neckline joining the troughs between them. It is the most recognizable reversal shape and the most over-identified.
Gaps
A gap is a space on a chart where a bar opens away from the prior close and nothing traded in between. Many gaps fill and many do not; the cause matters more than the shape.
Reversal Candles: Hammer, Engulfing, Doji and Shooting Star
A doji, hammer, engulfing or shooting star candle describes a session's balance between buyers and sellers. Their meaning depends on where they appear; the word reversal promises more than they deliver.
Volume Confirmation
The idea that a price move backed by heavy participation carries more information than the same move on light volume. It is the most durable principle in pattern work.
Failed Patterns, and What They Tell You
A failed pattern breaks the wrong way after appearing to complete, such as a breakout that falls back into its range. Most patterns fail, and a failure carries information because of who it traps.
Rising and Falling Wedges
Two converging lines that both slope the same way. The convergence is the observation; the direction attached to it in the folklore is a separate claim.
Pennants and Rectangles
Two continuation shapes that differ only in whether the pause is converging or flat. Both describe a period in which nothing was decided.
Descending and Symmetrical Triangles
The other two triangles. All three describe a narrowing range, and the labels differ only in which boundary is flat.
Rounding Bottoms and Tops
A gradual curve rather than a sharp reversal. It describes a slow change in the balance between buyers and sellers, and it takes a long time to become visible.
Island Reversals
A cluster of bars separated from everything around it by gaps on both sides. Rare, unambiguous to identify, and about the population of holders trapped inside it.
Morning and Evening Stars
A three-bar sequence: a strong bar, a small indecisive one, and a strong bar the other way. The middle bar is where the description lives.
Harami and Engulfing Patterns
Two two-bar relationships that are mirror images: one bar contained inside the previous one, or one bar covering it entirely.
Piercing Lines and Dark Cloud Covers
Two-bar patterns defined by how far the second session recovers into the first. The threshold is a convention, and the degree is the information.
Three White Soldiers and Three Black Crows
Three consecutive strong sessions in the same direction. The pattern is a description of persistence, and persistence is exactly what momentum research measures.
Measured Moves and Targets
A pattern's price target is usually a measured move: the pattern's height added to the price where it completed. Every named pattern scales the expected move to the size of the structure this way.
Timeframes and Multi-Timeframe Analysis
A chart's timeframe is how much trading each bar summarizes. It decides what is signal and what is noise, and the same price series can give contradictory readings on different timeframes, both correct.
Linear and Logarithmic Price Scales
On a linear scale equal distances mean equal dollars; on a logarithmic scale they mean equal percentages. Over long spans the two produce genuinely different pictures.
Chart Styles: Candles, Bars, Line, Area and Heikin-Ashi
Each style discards something different. Knowing what a style is throwing away is what stops it from misleading you.
Adjusted and Unadjusted Prices
Historical prices are routinely restated so that splits and dividends do not appear as real moves. This is correct, and it means the chart does not show what the stock actually cost.
Extended-Hours Data on a Chart
Whether a chart includes premarket and after-hours trading changes its bars, its gaps and every indicator computed from them.
Drawing Tools and How to Use Them
Drawings are a record of an analysis, and they are also the easiest way to convince yourself of something that is not there.
Chart Layouts and Saved Templates
A layout is a saved way of looking. Fixing it in advance is what makes comparisons across securities and across time meaningful.
Real-Time and Delayed Market Data
Market data is licensed, and a delayed feed is a licensing outcome rather than a technical one. Knowing which you are looking at matters for anything time-sensitive.
Renko and Point and Figure
Two chart styles that remove time from the horizontal axis entirely. A new mark appears only when price moves a defined amount.
Bar Replay and Reviewing Your Own Decisions
Stepping through a chart bar by bar, with the future hidden. It is the only charting tool that addresses hindsight directly.
Price Alerts
A price alert is a notification sent when a stock reaches a level chosen in advance. Its underrated function is that it lets a decision be made before the moment it applies.
What a Stock Alert Service Is
A stock alert service sends a notification when something specific happens in a stock: a price level is reached, a scan condition is met, or an analyst publishes a setup with its levels.
Stock Scanners and Screeners
A stock scanner tests a whole market against conditions such as price, volume, relative volume or gap size, and returns the stocks that match. The result is a shortlist to study on a chart.
Comparison Overlays and Ratio Charts
Plotting two securities together, or dividing one by the other. The second is more informative and is used far less.
Workspaces and Comparing Several Securities
Several charts on one screen. The value comes from them being configured identically, which is the only thing that makes the comparison real.
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.