Trading guides

Reading a chart

Start here if a chart still looks like noise. These guides cover what a single candle records, whether the candles in front of you are real prices at all, how a market leaves a trail of highs and lows behind it, why some price levels keep mattering, and what a line drawn at an angle proves.

• How to read a candlestick chartA candlestick shows four prices and nothing else: open, high, low and close. Here is how to read one, in what order to read a chart, and what a wick means.
• What is Heikin Ashi?Heikin Ashi looks like a candlestick chart and is not one: its open and its close are calculated, so neither ever traded. How to spot it, and what stops being true.
• Which timeframe should you use?A timeframe decides how much of the market you see and how much noise comes with it. What each one is good for, and why two timeframes disagreeing is normal.
• What is market structure?Market structure is the sequence of highs and lows a market leaves behind. Here is how to read it, and what a break of structure and a change of character mean.
• What are support and resistance?Support and resistance are price areas where a market has repeatedly stopped. Here is how to find them, and why the obvious ones are the ones that matter.
• Trend lines, channels and wedgesA trend line is worth a different price at every candle, which explains what it can and cannot show. How to draw one, and why the angle is not in the market.
• What is an opening gap?An opening gap is a break in the price series: the market closed at one price, opened at another, and nothing traded between. Why the empty band is not a level.

Chart patterns

The shapes a market leaves when it fails at the same place twice, or when its range narrows to a point. Each guide says where the pattern is confirmed, and what it means before that.

• What is a double top?A double top is two attempts at the same high that both fail. Here is how to tell one from a range, and why the neckline is the only part that matters.
• What is a head and shoulders?A head and shoulders is three attempts at a high where the middle one goes furthest. How to find the neckline, and why the pattern only exists once it breaks.
• What is a triangle pattern?A triangle is a range that narrows. What ascending, descending and symmetrical triangles record, why the break direction is not decided ahead, and how flags differ.

Indicators

An indicator is arithmetic on the prices you can already see. It adds no information the chart does not hold, and they are all misread the same way: as instructions rather than as descriptions.

• What is a moving average?A moving average is the average closing price of the last N candles. Here is what it shows, how SMA and EMA differ, and why a crossover is late by construction.
• What is the RSI?The RSI measures how fast and how far price has moved recently, on a scale of 0 to 100. Here is how to read it, and why overbought does not mean sell.
• What is the MACD?The MACD compares two moving averages to show whether momentum is building or fading. Here is how to read it, and why a crossover is not a signal.
• What is the stochastic oscillator?The stochastic asks where the close sits inside the recent range, from 0 to 100. Here is how to read %K and %D, and why overbought means a strong trend.
• What are Bollinger Bands?Bollinger Bands are a moving average with two standard deviation lines around it. Here is what a band touch means, and why the squeeze is worth watching.
• What is the ATR?The ATR is the average distance a market travels in one candle, gaps included. What it is for, why it has no direction, and why it is the honest way to size a stop.
• What is the ADX?The ADX measures how directional recent movement has been, from 0 to 100. Why it says nothing about which way, and why a rising ADX can mean a falling market.
• What is the Ichimoku cloud?Ichimoku is five lines, four of them midpoints of past ranges. What each one measures, what the cloud is, and why two lines are drawn in the future.

Calculated levels

Levels that are worked out rather than observed: from the size of a move, or from the previous session. They hold when enough people are looking at the same arithmetic.

• What is a Fibonacci retracement?A Fibonacci retracement splits a move into percentages to show how deep a pullback has gone. Here is how to draw one, and why it is a map and not a signal.
• What are pivot points?Pivot points are support and resistance levels calculated from yesterday's high, low and close. The formula, why they work when they do, and where they mean nothing.

Volume

Price tells you where the market went. Volume tells you how much business was done getting there, and which prices the market actually cared about.

• What is volume in trading?Volume is the number of units traded during one candle, drawn as a bar under the price. What one bar counts, what a big bar does not prove, and where it is not real.
• What is VWAP?VWAP is the average price of the day weighted by volume: where most of the day's business was done. Here is how to read it, and why it resets every session.
• What is a volume profile?A volume profile shows how much traded at each price. Here is how to read the point of control, the value area, and what a low volume node means.

Order flow and smart money concepts

This vocabulary comes from a school of chart reading that renamed a set of older order-flow ideas. These guides define the terms precisely, and say plainly which parts hold up on a chart and which are stories told after the fact.

• Smart money concepts, explained plainlySmart money concepts renamed older order-flow ideas. Here is what SMC actually claims, the vocabulary it uses, what holds up on a chart and what does not.
• What is liquidity in trading?A liquidity pool is where a crowd of stop orders sits, just beyond a cluster of highs or lows. Here is why price hunts them, and how to spot a sweep.
• What is an order block?An order block is the last opposite candle before the move that broke market structure. How to find one, and why the break qualifies it.
• What is a fair value gap?A fair value gap is the range a market leaves behind when it moves so fast it only trades from one side. How to spot one, and when it fills.
• Trading sessions and killzonesA trading session is the stretch of hours when one region's participants are active. When each one runs, why the overlaps carry the volume, and what a killzone is.

From reading to acting

What separates a chart you understand from a decision you can defend: naming the state of the market, stacking reasons that are actually independent, and knowing what an order does before you send it.

• What is a market regime?A market regime is the behaviour a market is in: trending, ranging or expanding. How to name the one in front of you, and why a rule fails in the wrong one.
• What is confluence in trading?Confluence is several independent reasons pointing at one price. What counts as independent, why three versions of one idea is not confluence, and how to weigh it.
• What is the risk reward ratio?The risk reward ratio compares what a trade risks with what it aims for. How it is calculated, why a high ratio is not a good trade, and what to read it against.
• Order types, explainedA market order takes the price available, a limit order names a price, a stop order activates at one. What each guarantees, and what none of them guarantee.

Reading a chart with AI

What a model can actually take out of a screenshot, and what it has no way of knowing.

• How AI reads a trading chartAn AI that reads a chart works from the image, not from a data feed. Here is what it can take out of a screenshot, and what it has no way of knowing.

How to use these guides

They are meant to be read in any order. Each one is self contained and links to the others where a term needs a longer answer than a sentence.

Every guide exists in thirteen languages. The language button at the bottom of any page switches between them, and your choice is remembered.

These pages are educational. They are not financial advice, and nothing in them is a recommendation to buy or sell anything.