2. How to Read Stock Charts

Identifying Trends

Trends are one of the easier things to spot on a chart. When stocks are trading in a set direction, whether up or down, they are said to be trending.

Above you can clearly see that Apple is trending higher for a few months. The trick with trending stocks is to trade with the trend. Trying to fight it can be costly.

Look for pullbacks to important support levels or moving averages for entries to join the trend higher, in this case.

We don’t know when a trend will end so a good rule of thumb is to stay in the trade until we get consecutive closes below a support level or a moving average.

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