What a chart is made of
Lesson 1 of 4 · about 5 minutes
3 questions, each checked the moment you answer it.
6 steps · about 5 minutes
The interactive lesson walks these ideas one screen at a time and checks your answers as you go. The text below covers the same ground for reading.
A chart is a run of turning points
Price does not travel in a line. It pushes up until it stops and turns, then falls until it stops and turns again. The point where a push up ends is a swing high. The point where a fall ends is a swing low. Every pattern you will ever read is built out of these two things.
Real charts are messier
This is EUR/USD on a 4 hour chart, and it is doing the same thing: a high near the left, a long fall, a low, a bounce. Nothing is as neat as the drawing. Reading a chart is finding those turns in a picture that never looks like the textbook.
Each candle on this chart covers four hours
One candle records four prices from its four hours: the price it opened at, the highest price it reached, the lowest price it reached, and the price it closed at. The thin line above and below is the wick, and its ends are the highest and lowest prices. The thick body runs between the opening price and the closing price. Its colour says which way those four hours went: green when the close finished above the open, red when it finished below. One candle is also called one bar, and this course uses both words for it.