{"id":1003199,"date":"2022-12-26T20:00:52","date_gmt":"2022-12-27T01:00:52","guid":{"rendered":"https:\/\/www.finder.com\/ca\/?p=1003199"},"modified":"2026-03-09T18:25:57","modified_gmt":"2026-03-09T22:25:57","slug":"stock-market-charting","status":"publish","type":"post","link":"https:\/\/www.finder.com\/ca\/stock-trading\/stock-market-charting","title":{"rendered":"How to read stock charts"},"content":{"rendered":"

Learning how to read stock charts and recognize stock chart patterns can help you make smart investment decisions. Here\u2019s how it works.<\/p>

What is stock market charting?<\/h3>

Stock charting is the go-to tool for traders using technical analysis. Stock charts are basically line graphs showing the prices of an investment at different points in time. Other details like trading volume may also be depicted.<\/p>

Stock charts are most commonly used for spotting price and volume patterns when researching stocks. But charting can also be used to research other assets like bonds, commodities<\/a>, forex<\/a> and cryptocurrency.<\/p>

Charts provide a straightforward way to interpret an investment\u2019s past performance and future potential. Seeing a visual representation of prices and market data can make it easier to spot patterns and plot future movements.<\/p>

How to read stock charts<\/h3>

Here\u2019s a simple step-by-step guide breaking down how to reach stock charts if you\u2019re just starting out:<\/p>

  1. Find the trendline.<\/strong> When you look at the price chart of a stock or other asset, your first task is to spot the trendline. This will be the main line on the graph that tracks the price changes and connects them all. Take a look and see if this line is trending upwards, downwards, staying flat or if it\u2019s moving up and down a lot.<\/li>
  2. Look for support and resistance levels.<\/strong> This will show you the minimum and maximum price levels that an asset trades within. Finding this range for a given period of time can give you a good floor and ceiling to work with when you\u2019re setting up trades. But remember these lines can still be broken.<\/li>
  3. Understand the dividend schedule. <\/strong>Many stocks and shares will pay dividends to shareholders. For many dividend-paying stocks<\/a>, this will happen a few times a year. It\u2019s worth being aware of these dates because they can temporarily push the price up or down, before or after a payout.<\/li>
  4. Learn about past volume.<\/strong> At the bottom of most charts, you\u2019ll notice lots of small vertical lines. These show the historical trading volume of an investment. High or low trading volume can coincide with news and it shows if the asset was being bought or sold by many or few investors.<\/li><\/ol>