Reference: Technical Analysis of the Financial Markets By John Murphy Basic Chart Reading 1

OHLC Candlesticks Volume Trend 2 Topics

3 OHLC OHLC – Open High Low Close

4 OHLC Open Close High Low Chart Timeframe is represented by each bar: Ex. Daily chart 1 bar = 1 day Weekly chart 1 bar = 1 week Monthly chart 1 bar = 1 month

5 OHLC Open = Low = Close High Open = High = Close Low The price moved up during the day but closed at the opening level The price moved down during the day but closed at the opening level

6 OHLC Open High Price went up Low Close Price went down Open Close High

7 OHLC

8 Candlesticks Candlesticks or Japanese candlesticks

9 Candlesticks Bar = candle Tail / wick / shadow = Low Tail / wick / shadow = High Body color white/green = up Open Close

10 Candlesticks Bar = candle Tail / wick = Low Tail / wick = High Body color black/red = down Open Close

11 Candlesticks

12 Volume – number of entities traded in a given time period PriceVolumeMarket Up Bullish UpDownBearish DownUpBearish Down Bullish Volume

13 Volume should expand in the direction of the price trend Volume

14 Volume should expand in the direction of the price trend Volume

15 Trend – direction of the market – made up of peaks and through – does not move in a straight line Trend Three directions Up Down Sideways

16 Up Trend – series of higher highs (peak) and higher lows (through) Trend

17 Trend Down Trend – series of lower highs (peak) and lower lows (through)

18 Trend Down Trend – series of lower highs (peak) and lower lows (through)

19 Trend Sideways

20 Trend Support – area where the buying interest overcomes selling pressure Resistance – area where the selling pressure overcomes buying pressure *** Price movement is driven by supply and demand

21 Trend Support and Resistance reverses roles upon decisive penetration

22 Trend Support and Resistance reverses roles upon decisive penetration

23 Trend Three Classifications Short (near term) Medium (intermediate) Long (major) A trend has a time dimension that should be identified implicitly or explicitly.

24 Trend Three Classifications Short (near term; less than 3 weeks) Medium (intermediate; 3 weeks to 3 months) Long (major – 1 year +) A trend has a time dimension that should be identified implicitly or explicitly.

25 Thanks