Charts

📊 Getting Started with Charts: A Beginner’s Guide to Reading the Markets

If you’re new to trading, one of the first things you’ll see is a price chart or technical chart. But what exactly does it show—and how do traders use it to make decisions?

This guide will walk you through the basics of reading a chart, from choosing a ticker to understanding what price action means.

🧭 What Is a Trading Chart?

A trading chart is a visual representation of an asset’s price over time. Traders use charts to identify trends, spot opportunities, and make decisions based on how the market is behaving.

Before anything else, you’ll need to:

• Select a ticker — A ticker symbol identifies the asset. For example:
  • AAPL for Apple
  • BTCUSD for Bitcoin vs. the US Dollar
  • USDJPY for US Dollar vs. Japanese Yen
• Choose the market — This could be the stock market, crypto market, forex, or commodities.

Once selected, the chart displays how the price has moved in the past and how it’s moving now.

🔍 What a Chart Tells You

Most charts include:

• Candlesticks or bars – These show how much the price moved during a specific period (like 1 minute, 1 hour, or 1 day).
• Price axis (vertical) – Shows the current and past prices.
• Time axis (horizontal) – Shows when those price movements happened.
• Volume – Tells you how many trades occurred, which indicates interest or momentum.

🧠 What Is Price Action?

Price action is the study of price movement—without relying on technical indicators.

Unlike tools like MACD, RSI, or Bollinger Bands (which use past data), price action helps you make decisions based on what the price is doing right now.

For example, price action traders ask:

• “Is the price breaking above a resistance level?”
• “Is this candle showing rejection?”
• “Does this look like a reversal?”

By reading patterns in candlesticks and key levels, they respond to live market conditions instead of waiting for delayed indicator signals.

Let’s dive deeper what these questions actually mean;

🟢 “Is the price breaking above a resistance level?”

This question refers to a common technical analysis concept.

• Resistance is a price level where an asset tends to face selling pressure, often causing it to stop rising.
• When the price breaks above that level, it may signal strength and the potential for further upward movement.
• Traders often see this as a bullish sign, especially if the breakout is supported by high volume.

📈 Imagine a ceiling that price keeps hitting but can’t break. If it finally breaks through, it might keep going up.

🟠 “Is this candle showing rejection?”

This refers to candlestick analysis, where each “candle” on the chart shows price action during a specific time period.

• A candle shows rejection when price tries to move in one direction but gets pushed back before the period closes.
• This often looks like a long wick (or shadow) with a small body, meaning price was tested but rejected.

🔥 For example, a long upper wick can show that buyers tried to push the price up but sellers pushed it back down—indicating potential weakness.

🔴 “Does this look like a reversal?”

This is about spotting a potential change in trend.

• A reversal is when the current trend—either up or down—starts to shift in the opposite direction.
• Traders look for certain patterns (like double tops, head and shoulders, engulfing candles) or indicators that show momentum is slowing or changing.

🔁 If the market has been rising for a while and starts showing signs of exhaustion or turning lower, that could be a bearish reversal.

📊 Chart Types in TradingView (with Time Basis)

🧭 What’s the Difference Between Time-Based and Non-Time-Based?

Non-time-based charts are great for reducing market noise and spotting clean trends, but they don’t reflect when something happened — only what happened.

➡️Learn about the Stock Market

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