Understanding how to read charts is a pivotal part of being a successful and well-rounded trader.
I have met and know many extremely successful traders that never use chart research in their trading. This is done more so on the professional, market maker side of the business, and is not commonly done as a self-directed trader/investor.
In order to maximize profits, decrease capital risk, and put on trades with more confidence – it is very important to understand how to read, interpret, and analyze the price chart on the underlying security.
Chart reading is a very tailored process because what works for one trader might not work for another.
Things to Take into Consideration when Developing Your Charting Style:
In order the effectively interpret a stock chart you must understand and be able to answer the following questions: