A stock chart is just a picture of price over time. Once you know what the axes, lines and candles are telling you, the chart turns from noise into a story you can actually follow.
Learn by doing: read a live chart and call its next move in the up/down prediction game as you work through this guide.
Every stock chart shares the same skeleton. The vertical (y) axis shows price — higher up means more expensive. The horizontal (x) axis shows time — left is the past, right is the present. A line that rises from left to right means the price went up over that period; a line that falls means it went down.
The simplest chart is a line chart, which connects the closing price of each period. It is clean and great for spotting the overall trend. A candlestick chart packs in more: each candle shows the open, high, low and close for one period. A green (or hollow) candle means the price closed higher than it opened; a red (or filled) candle means it closed lower. The thin lines poking out — the wicks — mark the highest and lowest prices reached.
Reading a chart starts with naming the trend. An uptrend makes a staircase of higher highs and higher lows. A downtrend makes lower highs and lower lows. A sideways or ranging market bounces between a ceiling and a floor. Drawing a straight trend line along the lows of an uptrend (or the highs of a downtrend) makes the direction obvious and shows when it breaks.
Support is a price level where buyers have repeatedly stepped in and stopped the fall — a floor. Resistance is a level where sellers keep capping the rise — a ceiling. Prices often bounce between the two until one finally gives way. When price breaks through resistance, that old ceiling frequently becomes the new floor.
The bars along the bottom of most charts show volume — how many shares traded each period. A price move on heavy volume carries more conviction than the same move on light volume. A breakout backed by a surge in volume is more believable than one that happens on a quiet day.
Keep perspective: chart reading describes the past and hints at probabilities — it never guarantees the future. Our charts are simulated for safe practice; for real-market basics see the SEC at investor.gov.
Ready to test your eye? The up/down prediction game gives you a fresh chart every round, and the stock market simulator lets you trade on what you read with $10,000 of play money. New to candles specifically? See our candlestick patterns guide.
Start with the axes: price runs up the side, time runs along the bottom. Identify whether the line is trending up, down or sideways, then look at volume bars to judge how much conviction is behind each move.
A green or hollow candle means the price closed higher than it opened for that period; a red or filled candle means it closed lower. The thin wicks show the highest and lowest prices reached.
Support is a price floor where buyers tend to step in; resistance is a ceiling where sellers tend to take over. Prices often bounce between them until one level breaks.
Volume shows how many shares changed hands. A price move on heavy volume is more convincing than the same move on light volume, because more traders are acting on it.