Investing For Beginners: How To Read A Stock Chart :
Choosing Investing stocks is difficult and understanding stock charts are the first step to success. This is our beginner’s guide to reading a stock market chart.
The following article provides a method for collecting individual inventory. If you are a new investor, we recommend that you start investing in index funds or mutual funds. Keep your portfolio diversified and reduce risk as you learn more about the stock market.
If you decide to invest in individual stocks, this article focuses on valuing individual companies.
Read on if you are an experienced investor and want to learn an important stock selection tool.
Starting to invest can be intimidating or even scary for some. There is a lot of information to be processed. So how do you know where to start?
A good place to start is to read and understand stock charts. Yeah, looks a little bad, looks like BT isn’t for me, looks like BT isn’t for me, looks like BT isn’t even for me
In this article, I’ll discuss the fundamentals of a stock board and explain the main points to consider. Finally, I hope terms like “dividend”, “trend line” and “support lines” don’t sound so good.
What exactly is a stock chart and how does it help you analyze stocks Investing?
Simply put, a stock chart is a chart that shows the price of a stock over a five-year period. More advanced stock charts show additional data, and by understanding the fundamentals, you can gain a lot of insight into a stock’s historical, current and expected performance.
One of the best sites to look up basic inventory information is Google Finance. Yahoo! Finances take a back seat.
Now, let’s take a look at a typical stock chart. We use Apple for this article.
If you don’t already know, the sequence of letters after the company name is the stock symbol. Identify the company on the stock exchange.
I also took the liberty of filtering only the last ten years, which you can easily do by clicking the corresponding button (which I highlighted for you).
So here we look at Apple’s actions over the past decade. I bet you want to make it to the end of 2008!
Now, let’s dive into the different parts and sections of the stock chart so you can start reading one like a pro.
You can easily buy only Robinhood shares
The Robinhood app can make trading easier for investors by analyzing stocks using quick charts. You can quickly filter the chart by a performance from one to five years and tap anywhere on the chart to view historical prices. It’s actually very sweet.
Robinhood also has good news. It’s like a Facebook feed, just for stock news, and great for tracking market trends.
If you want to invest, the exchange will cost $0 with Robinhood.
Important Things to Know When Reading a Companion Card Investing
Now that you have a better idea of what a stock chart is, it’s time to learn how to read one. In its simplest form, a stock chart is exactly what I said above – a chart that shows the historical prices of a particular stock.
But it’s even more valuable if you can read this information and decipher what it shows, so you can make more accurate predictions about the stock’s future performance.
Next, I’ll talk about four key data points you need to understand to get the most out of the power of a stock map. Let’s take a leap.
1. Identify the trend line
This is the blue line you see when you hear about a stock: it’s going up or down, right? While the trend line sounds like common sense, there are a few things I want to highlight so that you can understand it in a little more detail.
First, know that stocks will have big dips and big returns. Don’t react positively or negatively to big dips or big gains. You need to use this section of the stock chart to see what’s going on.
The trend line should encourage you to look further. This is how Apple really started as a company from 2009 to 2012.
But what happened from 2012 to 2013? The shares started to sink – at the same time, the shares fell by more than 40%!
This is where your trend line comes in handy. The news comes and goes, but when the news coincides with a drastic change in the trend line, it’s something to watch out for.
If you’ve ever seen such a thing happen, I suggest you find out what’s happening to the company. Most strong companies can bounce back from these successes, but not all.
For the uninitiated at the time, Apple was undergoing major changes:
First, it was longtime CEO Steve Jobs who stepped down (2011). Apple also notes that profit margins are shrinking significantly despite the growing smartphone market. Eventually, they wanted to expand the smartphone to developing countries, where it was too expensive to compete.
These factors, along with many other variables, contributed to the decline in the share price.
But the new CEO, Tim Cook, has taken some strategic steps with the company to transform it, and the rest of the trendline proves it.
The lesson here is to use your trendline as the first high-level indicator for something to watch out for.
2. Find support and resistance lines
The next things to note are the resistance and support lines.
These are the levels at which the inventory stays within a certain period of time. A support level is a price below which stock is unlikely to fall, while a resistance level is unlikely to rise.
That is, until a major change occurs, such as a smaller profit margin.
Think of these lines as bumpers on a bowling alley. Push the ball back and forth between these inflated barriers as you play.
The price of a stock does the same within these support and resistance lines.
3. Know when dividends and shares will be paid
At the bottom of the graph you can see if and when the company has paid a dividend and if a stock split has already taken place:
A dividend is when the company (the board of directors) decides to return a portion of its profits to shareholders. If you own the shares, you get a small share of the profits.
Some companies issue dividends, others don’t. Just because a company issues or doesn’t issue a dividend doesn’t mean it’s worth investing. There are many other factors to consider.
Some companies prefer to focus on growth, so they invest their profits rather than returning them to shareholders. Other companies (like Apple) can pay dividends without compromising growth.
As you can see in the photo, Apple paid quarterly dividends to its shareholders in mid-2012.
It is also possible to check if the shares were canceled in 2014. The distribution of the shares is a strategic measure taken by the board to issue more shares to the public.
In this case, Apple did a seven-to-one split (see 7: 1), which means you now have seven for every AAPL stock you owned prior to the split. So, if you owned 100 APPL shares before pruning, you would now have 700.