Learning how to read charts is a crucial skill for stock investors. This skill will make you a lot of money over the long term if you use it, so don’t skip this!

You’ve heard the saying that a picture is worth a thousand words. This is especially true with stock charts. They allow you to see at a glance an incredible amount of information that you could not see or read about otherwise.

Charting is a cornerstone of technical stock analysis. At its essence, a chart is just a graphic representation of prices and other indicators over time. Looking at a stock or market index chart allows us to determine its trend whether it is moving up, down, or sideways.

In addition, using certain indicators or chart patterns, we can use charts to determine entry and exit points for our stock purchases.

Learning to read charts is an essential tool for investors. In one glance, you can determine how the stock price has been behaving over time, and if big funds or institutions have been buying or selling the stock. Both of these items can give you clues to future performance. Plus, using charts to find the best point to buy and sell a stock is crucial.

Most of the following charts are generated at Their charts are easy to read, especially for beginners. This is a great free resource you should use, as you can choose various times frames, add various indicators, and more. Its main limitation for free users is that it will not generate charts longer than 2 years.

The charts at Yahoo Finance allow you to view charts going back decades. Yahoo Finance charts are also free to use. Yahoo changed their charts in mid-2014, and in my opinion they are hard to read.

Stick to the charts unless you want to look at monthly long-term charts. Monthly are not available for free from; you would have to sign up for their paid service.

Let’s use Starbucks stock charts as our example to illustrate the various aspects of charting.

Please note that you can click on all the charts in this course to see a larger version.


The timeframe you choose to view a chart is important. The chart below is a daily chart that shows daily prices of the stock going back 6 months. The daily chart is the chart that most investors look at first.

On a daily chart, each vertical red or white entry (called a candlestick) on the chart is one day. We will discuss candlesticks later in this tutorial.

Chart courtesy of
(Click to enlarge)

SBUX daily chart


The next chart below is a weekly chart that shows weekly prices of the stock going back 2 years. On a weekly chart, each vertical red or white candlestick is one week.

Chart courtesy of
(Click to enlarge)

SBUX weekly chart


It is very important to look at a stock from various timeframes to get an idea of how it has acted over recent months as well as over the years. Generally, I will look at the daily, weekly, and 10+ year charts for any stock I am interested in.

The charts at Yahoo Finance allows you to view charts with any timeframe you choose, and I use their charts for viewing time periods longer than 2 years.