How to Read Stock Charts - Market Trends
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In this video, you will learn how to read a stock chart effectively.
Learn more from the full courseThe Complete Technical Analysis Trading Course (New 2021)
Master Technical Analysis, Candlesticks & Chart Patterns For Forex, Stock Trading, Options Trading & Fibonacci Trading
09:39:12 of on-demand video • Updated November 2021
- Master Technical Analysis Indicators, Oscillators, Chart Patterns & Candlestick Patterns With Real World Examples
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- How to Build a Strong Technical Analysis Foundation For Stock, Options, Forex & Crypto Trading
- How to Read Stock Charts Effectively to Identify Market Trends
- How to Perform Multiple Chart Time Frame Analysis
- How to Use Support & Resistance For Determining Entry & Exit Points
- How to Use Levels, Trend Lines, Channels to Determine Market Moves
- How to Avoid Costly Trading Mistakes and Develop The Right Trader Mindset
- How to Trade With Support & Resistance + Trade Setups
- How to Trade With Fibonacci & Extensions + Trade Setups
- How to Trade With Exponential Moving Averages + Trade Setups
- How to Trade With Parabolic SAR + Trade Setups
- How to Trade With MACD + Trade Setups
- How to Trade With RSI + Trade Setups
- How to Use Chart Patterns to Determine The Next Market Moves
- How to Trade Wedges, Triangles and Pennants
- How to Trade Double Top + Double Bottom
- How to Trade Head and Shoulders + Cup and Handle
- How to Trade Single Candlestick Patterns
- How to Trade Double Candlestick Patterns
- How to Trade Triple Candlestick Patterns
- And a lot more...
English [Auto] Hi everyone This is Stephen and I'd like to welcome you back to our second technical analysis video on market trends. So let's go ahead and jump right into it. There are three kinds of market trends that we're going to talk about today. The first trend is the uptrend or bull market. And this is a move upward in the market over a fairly extended period of time in a bull market. Each peak and trough is higher than the previous one. What that means is each movement up followed by a subsequent movement down is higher than the previous movement up and movement down. Bull markets are generally less volatile than bear markets it's not always the case but usually and the movement in a bull market is usually slower when compared to a bear market a downtrend or a bear market is when the market moves down over an extended period of time. In this case each peak and trough is lower than the previous one. Bear markets tend to be more volatile than bull markets and they also tend to happen more quickly than a bull market and we'll see that. And a couple of charts that we'll look at in just a minute. Finally the third type of market trend is a sideways or consolidating market in this case a stock or a market is moving in a range between two price levels. A consolidation can be a trend unto itself. You can have a consolidating market that consolidates for years or you can have a consolidation movement within a bear or bull market. So you'll have a strong move up and then a consolidation for some amount of time where the market moves sideways and then you'll have another move up or you can have the opposite in a bear market where the market's moving down. You have a sideways movement for some amount of time and then you'll have a continuation of the bear market before we look at a few chart topper just a second about why we care if we're in a trend downtrend or a sideways market when we are trading using technical analysis when using technical analysis we're looking for the story behind the price movement in the stock up to this point. Now we're trying to determine where the stock is headed from there. So we want to look at the various factors surrounding the stock the price the volume how quickly the stock is moving up or down. And one of the factors that we want to consider is whether or not the market and or the stock is an uptrend or downtrend if we want to trade long the stock then we prefer a stock or a market that's in an uptrend. And if you want to short a stock we prefer a market or a stock that's in a downtrend. If we're trading a rank range bound stock then we know where to put our buy orders and our sell orders depending on where the stock is within the range that's at the lower end of the range we'll be looking to buy more. And if it's the higher end of the range we'll be looking to do more sell trading. And that's why knowing where the general market is headed as well as knowing where your stock is headed is important and technical analysis analysis take a look at the bull market and two bear markets that are taking place in the last 18 years. The first part we're going to look at is the S&P 500 the S&P 500 hasn't been in a bull market since March of 2009. And if we if you look at the lower left corner you can see the beginning of the bull market that said here in March 2009 you'll see the market steadily climb until May 2010 and then you see a slight pullback as we were talking about before the market peaked in May 2010 pulled back to a slight trough in July 2010 and then headed back up you'll see another peak in May 2011 and then pull back to a trough in October of 2011. You'll know the trough in October 2011 was higher than the trough in July of 2010. So the bull market remained intact. The market climbs again and then peaks in April 2012 which you will note is higher than the peak in May of 2011. And then you'll see a slight trough in June of 2012. But again a higher than the trough set and October of 2011. So again the bull market is still intact and you'll see the market steadily climbed up through January of 2015 and then hold back the bottom of the trough is January 2016 before climbing again and again this trough is clearly much higher than the trough set back in June of 2012. Market starts moving higher again and we get to where we are today. And August of 2000 18 and the bull market is still intact. Well I think what you've noticed in this bull market is the size of the candlesticks. Each one of these candlesticks represents a month and you'll know that there has been a fairly orderly progression to the upside in this market. You don't see a lot of volatility. There is some and the 2000 15 to mid 2017 time period you have these larger candlesticks. But generally a bull market is pretty tight it candlesticks. There's not a lot of range is just a continual march to the upside. And I want you to notice the contrast between that and the bear market. Now we're going to look at now. So let's not take a look at two bear markets that occurred in 2000 between the year 2000 and 2008 and 9. The first major market started in September of 2000. You see that the market tops here at 153 59. And this bear market ended with the market being down 50 percent in October of 2002. Couple things I'd like to point out is how quickly the bear market took the S&P down 50 percent. It was only two years between the beginning of the bear market and the end of the bear market that the market was down 50 percent before that the market had been climbing for several years in a bull market. You'll see this again as the market began a bull move in October of 2002 for five years. We had a bull market up until October of 2007 and at that point the market turned bearish. And you can see the really sharp declines I was talking about volatility before and how it's not that great in a bull market generally but you can see on these monthly declines there's a really sharp decline in the market. And in this case this Mayer market ended with a 57 percent decline from peak to trough. So let's zoom out now so that we can see both the bear and the bull markets that we've talked about. And you can see the contrast between the very sharp decline especially in this bear market. But you can also see it over here and the less volatility especially after 2012 and this bull market. There was a slight uptick in volatility here but it's nothing like the volatility that we saw in August of 0 8 and October of 0 8 timeframes as we were talking before about the importance of knowing what type of market you're in when you're trading. You wouldn't want to be long very often in a market that's dropping 50 percent or in a market that's dropping 57 percent in two years. But if you see a chart like this where the market is steadily moving up then most of your trades are going to be to the long side. What the market chart does is give you a big picture train to begin your analysis with and then you can go into some of the analytical frameworks that we'll be talking about later. So that's market trends. Thank you for watching and we'll see you next time. We'll talk about using different chart time frames for different trading styles. See the.