How To Read Stock Charts For Beginner Investors

Many people who are looking to learn about investing their money want to learn how to reach stock charts, making it easier for them to improve their foundational knowledge so they can apply it to see results. Investing for beginners can seem a little intimidating, especially if you’re not very knowledgeable about buying and selling stocks.


What Is A Stock Chart?


A stock chart is essentially a graph detailing stock price fluctuations across a certain time period, such as 3-5 years. You can expect to find a lot of data on stock charts by learning the fundamentals.


This allows you to extract key information about a stock’s performance to study the trends and make smart decisions about buying and selling individual stocks. This is an effective strategy undertaken by many investors who use their knowledge and skillset to purchase stocks strategically, earning a significant profit in the long run.


Reading And Analyzing A Stock Chart


You can analyze the stocks of any company by searching for company letters online. For example, Apple shows up as ‘AAPL’ and gives the complete stock data for you to expand and analyze.


If you go to the settings and filter out a specific time period, you will be able to look at, say, 15 years of Apple’s stock. Once you learn how to extract the correct information from a stock chart, you can make accurate predictions about future performance. There are a couple of main data points to consider




By identifying the trendline, you can easily see if the stocks are going up or down, making it possible for you to study its trajectory. It’s important to realize that stocks normally go through significant fluctuations, so don’t get too excited if you notice positive and negative drops or gains.


In 2012-2013, Apple’s stocks plummeted by more than 40%, which spurred many analysts to consider what was going on in the company. Many organizations quickly make a comeback from drops in stock by making changes in their marketing and sales, which means the trendline is an opportunity to pay close attention to what’s happening.


Lines Of Support And Resistance


A line of support indicates that the stock price will most probably not drop below this value, while a line of resistance suggests that the stock price will not rise above it. Sometimes there are major changes like profit reductions, which can cause stocks to fluctuate away from these predetermined lines. A stock’s price typically changes within these lines, letting you know when the right time is to buy and sell.


Dividends And Stock Splits


Sometimes companies issue a dividend to return revenue to the shareholders, giving them a small share of the profits. Stock splits are strategic moves that return stock shares to the public, allowing you to make the most of the situation. Reading and understanding these trends allows you to invest at the right time.


Final Thoughts


Investing for beginners is not too difficult if they have the right guidance and learning how to read stock charts is straightforward. You must conduct some research to improve your foundational knowledge, contributing to profits in the long run.