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Greetings, readers of the trading blog. Reading a candlestick chart is a bit like reading a book. When we see a book with an interesting table of contents, we want to open it to the first page and see what chapters are included in it. If interest in it remains, then we move on to reading the text. The same goes for reading candlestick charts. Read the explanation further in the article.a

This graphic model the one you are looking for. The daily chart here acts as a “big canvas” on which the search is carried out.

Here's an example:

Not bad. Intriguing. The strong resistance level at $33 has been broken, and the price has consolidated quite high. The intersection of moving averages indicates a change in trend direction.

Chapters

This is the same chart just a few days later. A good setup for opening a long position. The price rolled back to the previous resistance level and this is the first rollback after the trend change and after the breakout important level. The intrigue is growing. Will the price strengthen and reverse into the third? Elliot wave?

Great. But there is one component missing...

Text

Candles on a chart are like words in a book. They show who wins the battle between bulls and bears. Look at the continuation of our promotion chart:

Four bearish candles in a row and suddenly a bullish one appears. Moreover, its lower shadow falls far beyond the resistance level, but the closing occurs above it. This is a good sign that the resistance level may turn into support and buyers will prevail over sellers.

Most new traders don't look at candlestick charts this way.

They focus solely on the "table of contents". Or they get too attached to the “text”. It seems that they suffer from tunnel vision, which gives them the ability to concentrate only on one part of the graph.

I'm sure every trader goes through moments like this. You need to learn to perceive the chart as a whole. The more evidence you find on it that you are right, the better.

For example, on the stock chart discussed in this article, we confirmed the correctness of our judgment about the continuation of the upward trend and the resistance level, which then became a support level. And the intersection of moving averages. And candlestick analysis (of course, ideally it would be if a “hammer” or “shooting star” was formed).

Each candlestick chart tells you its own story. It's up to you to read it or not. But, if you have already taken it, then pay attention to all its components. Trading Blog thanks you for your attention. Be successful!

Worth a look -

Dedicated practical application price action method using the Russian example stock market, caused mixed reactions. For some, everything was clear, for others, everything was incomprehensible, and for others, they did not react to her at all. In general, this is not the point. Our dear readers wrote that they do not see on the chart what I, for example, see. That they can’t (don’t know how) to read a chart. Of course, I tried to find out what exactly was missing, but I didn’t get an answer.

I decided to write another short note in which, using an example, I will try to outline my understanding of what it means to “read a chart.” If you're interested, welcome!

Today my test subject will be the Canadian dollar.

Let’s take a clean chart (without indicators!) and “by eye” determine the main direction of price movement. No trend lines, swings, waves, fibonacci and other dregs are needed here! Don't complicate it!!!

This is a line chart, but you can just as easily use candlesticks or bars. The main thing is not to look for anything on it. No pin bars, takeovers, etc.

What happens to the price? In what direction is it moving? The direction of the graph is up. Yes, I don’t argue, there are fluctuations up and down, there is even lateral movement. But overall the graph is growing. I really hope this is clear. Because if this is not visible, then it’s time to take an interest not in trading, but in a school geometry course.

After we have decided on the main direction of the price, it is necessary to recall the theory of Charles G. Dow and one of the three postulates of technical analysis. By the way, a quick question - which one exactly? If, suddenly, for some reason, you are hearing about them for the first time, then I strongly recommend reading some book on technical analysis (Nyman, Schwager, Elder, etc.). It doesn’t matter which author, 90 percent of them are all the same. If you have forgotten these postulates, then I also recommend opening the book, finding them, printing them on a large sheet of paper and hanging them near the computer on which you have installed trading terminal.

It was a kind of preparatory stage. Now let's start analyzing the graph in more detail and break it down into separate components. That is, from left to right, let's follow the price and try to understand what was on the market before and what is happening now.

For this stage of chart analysis, you must be able to work with trends. You must know what is a trend, what types of trends are there, what are the phases of a trend, how to determine a trend (without indicators!), what is impulse and correction. If you don’t know this, you can find answers to these and many other questions in my webinars.

To some, everything I wrote above may seem like water. But I purposefully pay special attention to this. This is really important! This is the basis, this is the foundation. It amazes me how people, without understanding these basic concepts, try to get into “higher mathematics”.

So let's get back to the drawing.

1. Since October 2014 there has been an upward trend.
2. The price enters the balance stage (flat).
3. Breakout of the flat and exit from the balance stage. IN technical analysis- this is one of the trend reversal methods.
4. Pullback (retest) flat borders. In this section of the chart, the price returned approximately to the lower border of the broken trading range.
5. Here we see that the price “did not want” to go down and the trend continued.

And just a few questions for self-control: how to determine a trend without indicators and how to identify a trend reversal?

If you cannot answer these questions, then everything that will be written below is not yet for you. By the way, the numbers “4” - “5” indicate a rather complex fragment of the graph. For example, for a very long time I could not believe that after such a breakout, and even with such a pullback, the uptrend continued.

Notice the area highlighted in yellow. Now, we understand that it was from this point that our bullish trend continued. Understanding the importance of this zone brings us back to trading the supply and demand zones, but this is a completely different story, which we will talk about some other time.

So, we have decided that currency pair is in both a long-term and short-term upward trend. In the next step, we will look at the chart in more detail and take the last current movement for analysis. The same thing that started, or rather continued long term trend On the market. On a chart, what is most important is always what is closest to current price, the further the graph goes into history, the less important and meaningful it becomes for us.

I sketched out the following markup:

Now I’ll explain what’s what.

1. A very important resistance zone. It is also the mirror level, it is also the border of our long-suffering balance/flat.
2. A trading channel that “drives” our trend into a framework and shows a change in its direction (if the price goes beyond its boundaries). It is depicted on the chart solely for clarity, so that the upper border of the channel is broken through and the price exits it. This is a very important event in technical analysis.
3. A trend line built... But how and why this trend line was built, I suggest you answer on your own (there is a separate article on the blog dedicated to just such trend lines)

Well, we have more or less figured out the context, now let’s turn on the microscope and take a closer look at our favorite bars:

On July 15, a breakout bar with a wide spread appears. It seems like the price is dotting all the i's, indicating a breakdown and continuation of the bullish trend. But then we see an interesting reaction to this breakout - after the breakout bar, the price moves only 190 pips over the course of 7 bars. A good move, you might say, but until we compare this distance with the distance that the price traveled on the breakout bar. And here we see that in 1 day 220 pips passed, and in 8 - 190 pips.

Then a bearish pin appears. This bar signals to us that something has gone wrong for the bulls. We then see a decline and the appearance of another bullish pin bar as part of the fake pattern.

Next, pay attention to the measuring bear bar (the one before the second pin bar). What's interesting about it? Absolutely nothing, but until we compare it with subsequent bars. And we see that the price only needed 1 day to fall by 130 pips, and the bulls regained these positions over the course of 3 days.

As a result of all of the above, we can draw conclusions: although there was a breakdown of an important level, the price is not going up as actively as expected. This means that if you have the appropriate setup, you can sell. Such a setup can be the 1-2-3 pattern and the 2 B pattern. However, do not forget that the general long-term trend is upward, so sales will be counter-trend. Therefore, such a transaction will be at increased risk.

Let's sum it up

This article is not an instruction, not an algorithm, not a strategy, and in no case is it some kind of next Grail. In this article, using a specific market situation as an example, I wanted to show you my way of thinking. This is one of my market analysis techniques. What does it have to do with this, I have not yet taken into account the volume and higher time frame readings.

That's all. If there are any questions, I will try to answer.

Thank you for your attention and good luck in trading!

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23 comments to “ Learning to read a chart”

Vadim, the article is super, everything is covered. In my opinion, it is more useful than some sites that take years to fill out. Thank you very much.

Vadim, thank you very much for the article. I liked it very much. I didn’t analyze bars. Somehow it didn’t even occur to me. Still, a person is such a creature until you chew everything and put it in his mouth. Or when you don’t get it, you need to listen to the same thing many times and then you’ll get it. Thanks again.

Vadim, thanks for the article.
It’s written sensibly, but there’s a nuance about the “fake” thing. Well, it’s not on this chart! Fakes are a false breakout of the inside bar, that is, of course, the mother candle, but the pattern must (!) contain an inside bar. On your chart you have a regular “bearish” bar (not an internal one). And after it - a bar that, with some stretch, can be called a pin.
In general, what is highlighted in your red rectangle is the pattern “ candle reversal"(PPR). This is what we see on D1. If we imagine the virtual time frame D3 (that is, bring these three candles together), we will get a Pin bar on the D3 time frame. Classic…
You need to understand that the market is traded regardless of the standard time intervals specified in MT4. In our case, PPR is also aimed at continuing the uptrend, but it is traded somewhat differently.
Special thanks for not mixing everything together and understanding that Price Action is not candlestick analysis at all. Moreover, all of its patterns are conditional and are intended only to help, that is, to become only additional triggers for entry. No more. In general, it is quite possible to do without them (there are quite enough levels).
P.S. By the way, J16 itself only pointed to such patterns as: pin bar, outside bar and PPR. And now the whole Price Action bible has been written, and the patterns dazzle your eyes. So people don’t understand the difference between the Price Action method and candlestick analysis...

• Hello TovarisChi! 🙂
  Good topic you raised it, Vadim. Correct. I am 99% sure that in real life trading you don’t make such constructions, but see everything like this, without lines, levels and everything else. That is, one glance is enough.
  I call this “understanding the market.” Everyone has their own. And everyone sees the market in their own way. But the most objective information is the price. Everyone sees the same graph. And everyone should see the same thing. But no, everyone sees everything differently.
  In general, I agree with the Canadian’s view. The only point is point 4. I understood that this was not a pullback. This is a continuation of the upward trend. The Canadian is tied to oil and correlates well with it. And oil began to decline even then. Therefore, it was clear to me that there would be no downward trend. Plus, when we pulled back from the 4th point and were unable to create a new low. When we approached the highlands in the area of ​​point 2, I finally realized that there would be a breakthrough. At least false, but a breakdown. Exiled, I remember shorting Canada back then. There was a short stop at the highs, dojo pin bars were drawn by the price, but they did not work. In addition, news came from the fundamental metal that the regulator had reduced the rate. Galina also made +80% on this back then 😉
  I think we understand the market. It does not form immediately. I was lucky, I more or less developed it in 1-1.5 years of more or less active trading. Some take longer. Some are faster. Another question - is it necessary?
  Here you can start demagoguery. On the one hand, understanding is needed. Then you move into the caste of “superior traders”—discretionary traders. Such traders can understand when “there will be a movie and when there won’t be a movie.” They have the framework of the system, everything else is understanding. But also a clear MM. Plus discretionary traders always have a trading plan for all market events. They know in advance what they will do. However, it cannot be said that discretionary gurus are robbing markets. They have enough moose and profits. A good understanding of the market does not guarantee earnings. Understanding the market is one thing, being disciplined in executing a trading plan is another. After all, “I’m the smartest, I know where to enter and where to exit!”
  Another issue is the system. If there is a clear and unambiguous system, then is it necessary to understand what is happening in the market? Some instrument showed that the trend was upward, waited for confirmation from another and entered. Set a stop, profit and go for a walk. Yes, it will knock you out of the market a certain number of times, but as a result of a series of transactions you will be in the black. What else does?
  What am I talking about here? About the fact that you need to be able to read the market. On the other hand, if it doesn’t work out, then you shouldn’t bend yourself. Not everyone has the ability to “read the market.” If you have the discipline to follow some simple system, then go ahead. Stupidly trade the system and you will make a profit. Follow its rules and collect statistics.
  Vadim did not just come to such conclusions and vision of the market. It’s far from a fact that you will succeed too. You still have a different temperament, discipline, ability to motivate yourself, etc.
  “If you don’t understand pin bars, don’t trade” - Vasily. 😉
  Something like that.)))

• Friends! I'm having some minor technical problems on my blog. No big deal, but I had to restore the database backup. 🙁
  As a result, only two of today’s comments were “suffered” (Mikhail’s and mine).
  Mikhail, I would like to separately apologize for “losing” your comment. I'm really sorry, because the comment was really cool and useful. Hope for understanding.

  • I'm really sorry, because the comment was really cool and useful. Hope for understanding.

    This letter came to me in the mail as a comment from Mikhail. If you can, then retouch it)))))
    Author: MikhailComment:

    I completely agree that fakey is a false breakout of an inside bar. But I don’t read “bibles”, so I have a slightly different view on some points.

    But here I disagree. The point is that any market situation should always be viewed in context. And in particular, when an inside bar forms after a trend, there are two ways to trade it: with the trend or with a reversal. If it follows the trend, everything is clear. But if there is a reversal... Here you should always remember that there is a potential for the formation of a fake (false breakout) along the trend.

    For some reason, it seems to me that you are now long the Canadian, coming from the bullish pin of July 29th.

    Not certainly in that way. Entered from a pullback on July 31 at a price of 1.29 700. SL was at the level of 1.29 135 (middle of the day, that is, the Pin bar - July 29). I closed ½ position at the level of - 1.31,117 (in a ratio of 2.5:1 relative to the stop) after breaking through the last resistance level - 1.31,025. After a retest of the level - 1.31,117 and the resumption of the bullish trend, I moved the stop below the level - 1.31 025. Still in the deal, but have already forgotten about it. Take Profit stands at the level of 1.33 000. This is the next strong resistance. I forgot to say: I have an ECN account, so the spread is practically invisible.

    If you take a pin on a day, then within the day it will be a rejection of some level. After all, patterns didn’t come out of thin air. Any pattern has a logical explanation, and not just a “long tail”, “small body”, etc.

    Bravo! Nothing to add...

    And most of these people look at specific generally accepted time frames (I wouldn’t be wrong if I say the most popular are H1 and D1).

    So much the worse for them. This is where we make a profit, and they give us their hard-earned money.

    It’s possible, I now have the impression that good movements from levels occur without obvious patterns. Probably due to the popularity of RA.

    Not always. Very often the signals are processed. However, I rarely trade directly from levels. Usually during the day I look for the formation of a Pin bar (preferably with a false breakout of the level), or an Inside bar. Sometimes Fake. But mostly PPR. Then I switch to intraday timeframes and wait for confirmation of triggers on the daily chart. This is where I decide whether to enter into a deal or not. These manipulations help filter out false entries and significantly reduce the stop loss.

    But then how to filter transactions? Because by simply trading based on the level, the number of all trades, including unprofitable ones, will increase.

    Well, if you trade only significant levels, there won’t be many transactions. In general, most of those who try to trade price action for some reason forget about such a thing as momentum. That is, there must be an impulse in the direction of the expected price movement. Moreover, on lower timeframes you can always look at the bar on which we want to enter. And by directly analyzing the candles, you can see where the accumulation of volumes occurred (I’m not talking about such nonsense as tick volume or something similar). However, this topic cannot be covered within the framework of one comment.

    Thanks for the comment. It was nice to read.

    Mutually. It's nice to chat with a real trader. P.S. By the way, Vadim, I came across your site by accident. I was looking for information on how to switch from Forex to the stock exchange. I would like to trade there as well, otherwise the earth is full of rumors... And the site is interesting!

    We are vigilant!!!

• Moreover, on lower timeframes you can always see the bar on which we want to enter

  and if, for example, there is no way to look at the junior TF, then what to do then?

• Vadim, hello! This is not the first time I’ve heard about the PRR pattern. I looked on the Internet, there is a description, but there is no information on how to work it out. Please tell me.
  Best regards, Olga

  • Just like other patterns - for a breakout. But you can come up with your own criteria for working out. This is trading :)

    • It's not entirely true for a breakdown. IMHO. Our stops should be as small as possible and our potential profit as large as possible. It is always better to enter from a pullback to some level. Same with PPR. If Vadim allows it, I’ll give you a few links below on the topic of the post:
      _http://forexlis.ru
      As for me, this is the most intelligent resource about Price Action on the Russian Internet. It was there that I finally learned to trade using this method. Lots of videos. By the way, the last posts are dedicated to PPR.
      _http://tradelikeapro.ru/
      Also a pretty good resource. There is a free course on Price Action patterns. However, most of the information is about trading. This site does not provide direct instructions for action. But some interesting things are still published here. There are also a lot of videos.
      _http://forum.roboforex.ru/showthread.php?t=863 - Oleg's thread (nickname - raekwon).
      May Vadim forgive me, because this URL does not lead to home page site. But the fact is that the rest of the infrastructure on this forum is pure garbage. And I give the URL to those who want to see how a person trades the classic Price Action. That is, exactly how James16 trades with Forex Factory. Just levels and a couple of patterns, and that’s it. It is there that you can find explanations of how I trade as a pro on a clean chart. By the way, the information is only text and pictures, no video.

      But the RA course pales in comparison to the VSA course.

      Oh, ho, ho. Well, how much can you talk about VSA? Well, there are no volumes in Fores. More precisely, there is, but not teak. After all, what is tick volume by definition? This is supposedly the volume for a certain interval during working day! Price Action is traded on daily candles. And tick volume should supposedly only be looked at within a day. Well, why is it needed?
      By the way, those who say that there is no real volume on Forex are also lying. And price action will help us. Well, a Pin has formed on the daily chart, and even at the support/resistance level - good. Now let's go to H4 or H1. And let's see how this same Pin was assembled.
      — If there was initially consolidation in the area of ​​the th tail, it means someone was gaining a position. And if after that there was a sharp impulse to close the day, then there is potential for movement.
      - If the price approached the level relatively calmly, and then, for some unknown reason, turned in the other direction and the day closed on the side opposite to the level - personally, I would think about whether this signal is worth trading...
      Yes, there is no order book for forex in MT4. Yes, there is no data on the volume of transactions. And there isn't much else. But there is a price. So we negotiate the price. WE TRADE WHAT WE SEE! And where someone gains a position, or the volume accumulates (trading at the level) and the mood of market participants, and who is stronger now - everything can be seen on the price chart if you know how.
      But the tick volume indicator is just an indicator, and therefore secondary and useless...

      The way James trades is the only way he trades. Everything else is just an interpretation on the topic.

      It's hard to argue.

      All the RuNet sites about RA taken together cannot be compared with the James16 branch on Forex Factory.

      And here too.
      However, intelligence will still be taught. There would be a desire to listen and put it into practice. Otherwise... Any forex factor will not be of any use.

      In addition, you need to understand the current structure of the liquid market. These are thousands of robots, dozens/hundreds of banks, market makers and a bunch of traders. Each of them creates a unit of volume at a time. Yes, in a time when markets were over the phone and there was no software, volume was valuable. But now, in my opinion, volume doesn’t say much. Especially on Forex.

      So we negotiate the price. WE TRADE WHAT WE SEE!

      This is the only thing left for us, poor traders 😉

      But the tick volume indicator is just an indicator, and therefore secondary and useless.

      It’s quite possible to trade without volume, but without price...
      Personally, I am somewhat against volume in any form. It's of little use now. Although the BCA people are good at talking about “accumulations, distributions, upthrusts, etc.” But this is for me personally. I didn’t get used to the VSA. Although they sometimes tell me that “you should connect the volume to the supply and demand zones.”
      Well, that’s just me, insert 5 kopecks. I hope no one will be offended?

Stock charts are one of the most important tools for analyzing current market situations and predicting future price behavior. They allow you to determine the balance of power between bulls and bears and make a choice in favor of those on whose side the majority is. In addition, a stock chart can help assess the growth (or fall) potential of the instrument being analyzed in order to make a decision about entering a trade. This is where the study of technical analysis begins.

There are currently three main types of charts used in stock trading:

• linear
• Japanese candles

Line graph

The simplest and most understandable type of presentation for beginners stock quotes. These are the graphs that everyone drew at school and college. Points equal to the closing prices of the periods are plotted on the chart. And these marks are connected by lines. As a result, we get a similar picture.

Sometimes a line chart is displayed in a different form, when the entire space below the price is filled in with color. The picture below is similar to a linear graph, only in the form of an area.

A line graph is convenient for human perception, since it does not contain unnecessary information. Everything is extremely simple - the line goes up - an uptrend, falls - a downtrend. However, for more serious analysis it lacks a lot of additional information, so most traders use other types of charts.

Bars

A graphical representation of prices on a chart using bars is more informative. Unlike linear, bars additionally show opening prices, the maximum and minimum that the price reached in a given period.

The bar is a vertical line with horizontal segments on the right and left. Depending on the selected chart presentation interval, such data will be shown by one bar. If a daily interval is selected, then one bar is one day, a weekly one is 1 week, etc.

The length of the bar corresponds to the price range. The upper and lower points are the maximum and minimum quote levels, respectively. The line on the right is the opening price, on the left is the closing price. If the left line is lower than the right, then the closing price is higher than the opening price and we are seeing growth. And vice versa, when the left line is higher than the right, we get a closing price lower than the opening price and the market prices are falling.

Japanese candles

Japanese candlesticks carry absolutely identical information as bars, namely opening and closing prices, maximum and minimum quotes for the selected period. The difference between bars and candles is only in the graphical representation.

If bars are displayed as a horizontal line, then for candles the part between the opening and closing prices is drawn thicker. It is called the body of the candle. And the interval from the body of the candle to the high-low is the shadow of the candle.

In addition, depending on the rise or fall, the body of Japanese candlesticks is painted in different colors. In the classic version, white is growth, black is fall. Another common option: a combination of green and red colors, where red indicates a decrease in quotes, green indicates growth. Many traders use their own color combinations, but this is more a matter of habit.

Coloring improves the perception of the graph.

The same chart, presented in the form of Japanese candlesticks.

Using candles and bars in technical analysis

Example 2.

A candle referred to in Japanese analysis as a hammer. She talks about the following: when the market opened, the bears seized power and pushed the price down, but later their strength dried up and the majority sided with the bulls, who again raised the price up, almost to the opening prices. Therefore, there is a high probability of growth the next day.

Of course, a full analysis cannot be done based on just one candle. Combinations of them are usually used, in conjunction with support and resistance lines, which give a higher probability of the occurrence of predicted events in the future. Therefore, you need to correctly learn how to read stock charts for successful trading in the stock market.

The basis of all the basics for making a forecast on the stock exchange is the price chart. With its help you can find out who is stronger at the moment, buyers or sellers. Various combinations and chart movements make it possible to predict the most likely price behavior in the future, which provides an excellent chance to make money!

Reading a stock chart is a basic and necessary skill that is needed to conduct a good market analysis and successful trading in the future. Just as in reading, in order to read a book, you need to know the letters, so in trading, in order to learn how to read charts on the stock exchange, you need to know the basics. Let's talk about them in this article. Price chart or chart ( from English price chart), displays the price change by financial instrument over time. This allows you to visually assess the dynamics of movement and make a forecast.

There are graphs different types, but we will focus on the most popular ones that traders use and which are available in every trading terminal.

Main types of price chart display:

1. line graph
2. Japanese candles

Line graph

Displaying prices in the form of a line graph is the simplest thing you can think of. It looks like this:

Linear display of price chart

The timeline is displayed at the bottom, and the price is displayed vertically on the right. A line chart is built based on closing data each period ( the period will be clearer when analyzing a chart in the form of Japanese candlesticks).

This method of displaying prices was invented in Japan in the 17th century by traders on the rice exchange, and has since become widely known throughout the world. The Japanese candlestick chart is perhaps the most popular, informative and convenient for trading. It looks like this:

Thanks to each candle, you can find out the following price parameters:

1. opening price
2. closing price
3. minimum price per unit of time
4. maximum price per unit of time

Each candle represents the price fluctuation over one time period that the trader selects. Those. one candle, for example, can display all price movements for 5 minutes, an hour, a day, etc.

As one period, for example an hour, passes, the next candle begins to form, the formation time of which will also take one hour. The time period (timeframe) is set by the trader in the settings of the exchange terminal.

Schematic representation of Japanese candles

All parameters of candles have their generally accepted designations in English.

1. Opening - Open ( O)
2. Closing - Close ( C)
3. Maximum - High ( H)
4. Minimum - Low ( L)

A white candle indicates growth over a certain period of time, and a black candle indicates a fall. The colors of the candles can be set at your discretion in the terminal settings.

Data OHLC candles are displayed when you hover your mouse over them. This is how these options are displayed in the most popular terminal

Because Since price fluctuations are chaotic, candles come in completely different types. For example, candles can have no shadows, or when the high is the opening price and the low is the closing price. Or the opening and closing prices may be equal, etc.

By looking at the candle, you can understand how the trading took place during a given period of time, and who, in the end, took the upper hand, sellers or buyers. Also, the mood of market participants is clearly visible: how wide the range of the candle is, and how cautious players are when the range is small. This is clearly visible before the release of some important news, when the market freezes in anticipation, drawing candles with small ranges. Traders still talk about such a market that it stands still.

Let us show you an excellent example where, thanks to candles, activity and reaction to news are clearly visible:

While awaiting the speech of the head of the ECB, the price moved in a small corridor. As the performance began, activity increased sharply and the price dropped. This happens all the time at the exit. Therefore, at such moments you need to be extremely careful.

Learn to trade. Go ahead.

Quite often, thanks to the Japanese candlestick chart, you can detect reversals on the stock exchange in advance.

Notice how long the shadows of the candles are in relation to the body. This is often a harbinger of price movement in the opposite direction.

There are various combinations consisting of one or even several candles, with the help of which you can predict a market reversal or a strengthening of the previous trend.

Bar chart

Another type of price display, not as popular as Japanese candlesticks, but used by traders, mainly in the West. Looks like that:

There is some similarity with candles, but the price is displayed in the form of “columns” with “serifs” on the right and left.

1. Left notch - opening price - Open (O)
2. The notch on the right is the closing price – Close (C)
3. The remaining data (maximum and minimum) are displayed exactly like Japanese candlesticks.

Analysis and forecasting are carried out in the same way as is done with Japanese candlesticks. Therefore, we will not repeat the explanations. Let's better discuss the nuances of all types of chart displays that we have discussed.

Pros and cons of a line chart, Japanese candlesticks and bars

Let's display the pros and cons of the graphs in the table

	pros	Minuses
Linear	Clearly visible The ability to instantly see the state of affairs on the market	Almost no information content
	High information content It’s quite easy to visually understand how the price behaved over the selected period of time (black/white candlestick)	A little "visual noise". The chart may be difficult to read for beginners. But with experience it goes away completely
	Great if the forecast is made solely based on bar range analysis "Visual noise" is much lower than Japanese candlesticks	It is difficult to immediately determine whether the price is rising or falling in a selected period of time, as can be done with Japanese candlesticks

That’s probably all we wanted to tell you about how to read stock market charts. If you have any questions, welcome to the comments! We will be happy to answer you.

Happy trading!

Leading broker on FOREX market -

First, try to find the domain of the function:

Did you manage? Let's compare the answers:

Is everything right? Well done!

Now let's try to find the range of values ​​of the function:

Found? Let's compare:

Got it? Well done!

Let's work with graphs again, only now it will be a little more complicated - find both the domain of definition of the function and the range of values ​​of the function.

How to find both the domain and range of a function (advanced)

Here's what happened:

I think you've figured out the graphs. Now let’s try to find the domain of definition of a function in accordance with the formulas (if you don’t know how to do this, read the section about):

Did you manage? Let's check answers:

1. , since the radical expression must be greater than or equal to zero.
2. , since you cannot divide by zero and the radical expression cannot be negative.
3. , since, respectively, for all.
4. , since you cannot divide by zero.

However, we still have one more unanswered point...

I will repeat the definition once again and emphasize it:

Did you notice? The word “single” is a very, very important element of our definition. I'll try to explain it to you with my fingers.

Let's say we have a function defined by a straight line. . At, we substitute this value into our “rule” and get that. One value corresponds to one value. We can even make a table of the different values ​​and graph this function to see for ourselves.

"Look! - you say, ““ occurs twice!” So maybe a parabola is not a function? No, it is!

The fact that “ ” appears twice is not a reason to accuse the parabola of ambiguity!

The fact is that, when calculating for, we received one game. And when calculating with, we received one igrek. So that's right, a parabola is a function. Look at the graph:

Got it? If not, here is a life example that is very far from mathematics!

Let's say we have a group of applicants who met while submitting documents, each of whom in a conversation told where he lives:

Agree, it is quite possible for several guys to live in one city, but it is impossible for one person to live in several cities at the same time. This is like a logical representation of our “parabola” - Several different X's correspond to the same game.

Now let's come up with an example where the dependency is not a function. Let’s say these same guys told us what specialties they applied for:

Here we have a completely different situation: one person can easily submit documents for one or several directions. That is one element sets are put into correspondence several elements multitudes. Respectively, this is not a function.

Let's test your knowledge in practice.

Determine from the pictures what is a function and what is not:

Got it? And here it is answers:

• The function is - B, E.
• The function is not - A, B, D, D.

You ask why? Yes, here's why:

In all pictures except IN) And E) There are several for one!

I am sure that now you can easily distinguish a function from a non-function, say what an argument is and what a dependent variable is, and also determine the range of permissible values ​​of an argument and the range of definition of a function. Let's move on to the next section - how to set a function?

Methods for specifying a function

What do you think the words mean? "set function"? That's right, this means explaining to everyone what the function is in this case. we're talking about. And explain it in such a way that everyone understands you correctly and the function graphs drawn by people based on your explanation are the same.

How can I do that? How to set a function? The simplest method, which has already been used more than once in this article, is using the formula. We write a formula, and by substituting a value into it, we calculate the value. And as you remember, a formula is a law, a rule by which it becomes clear to us and to another person how an X turns into a Y.

Usually, this is exactly what they do - in tasks we see ready-made functions specified by formulas, however, there are other ways to set a function that everyone forgets about, and therefore the question “how else can you set a function?” baffles. Let's understand everything in order, and let's start with the analytical method.

Analytical method of specifying a function

The analytical method is to specify a function using a formula. This is the most universal, comprehensive and unambiguous method. If you have a formula, then you know absolutely everything about a function - you can make a table of values ​​​​from it, you can build a graph, determine where the function increases and where it decreases, in general, study it in full.

Let's consider the function. What's the difference?

"What does it mean?" - you ask. I'll explain now.

Let me remind you that in the notation the expression in brackets is called an argument. And this argument can be any expression, not necessarily simple. Accordingly, whatever the argument (the expression in brackets) is, we will write it instead in the expression.

In our example it will look like this:

Let's consider another task related to the analytical method of specifying a function, which you will have on the exam.

Find the value of the expression at.

I'm sure that at first you were scared when you saw such an expression, but there is absolutely nothing scary about it!

Everything is the same as in the previous example: whatever the argument (the expression in brackets) is, we will write it instead in the expression. For example, for a function.

What needs to be done in our example? Instead you need to write, and instead -:

shorten the resulting expression:

That's all!

Independent work

Now try to find the meaning of the following expressions yourself:

1. , If
2. , If

Did you manage? Let's compare our answers: We are used to the fact that the function has the form

Even in our examples, we define the function in exactly this way, but analytically it is possible to define the function in an implicit form, for example.

Try building this function yourself.

Did you manage?

This is how I built it.

What equation did we finally derive?

Right! Linear, which means that the graph will be a straight line. Let's make a table to determine which points belong to our line:

This is exactly what we were talking about... One corresponds to several.

Let's try to draw what happened:

Is what we got a function?

That's right, no! Why? Try to answer this question with the help of a drawing. What did you get?

“Because one value corresponds to several values!”

What conclusion can we draw from this?

That's right, a function cannot always be expressed explicitly, and what is “disguised” as a function is not always a function!

Tabular method of specifying a function

As the name suggests, this method is a simple sign. Yes Yes. Like the one you and I have already made. For example:

Here you immediately noticed a pattern - the Y is three times larger than the X. And now the task to “think very carefully”: do you think that a function given in the form of a table is equivalent to a function?

Let's not talk for a long time, but let's draw!

So. We draw the function specified by the wallpaper in the following ways:

Do you see the difference? It's not all about the marked points! Take a closer look:

Have you seen it now? When we define a function in a tabular way, we display on the graph only those points that we have in the table and the line (as in our case) passes only through them. When we define a function analytically, we can take any points, and our function is not limited to them. This is the peculiarity. Remember!

Graphical method of constructing a function

The graphical method of constructing a function is no less convenient. We draw our function, and another interested person can find what y is equal to at a certain x and so on. Graphical and analytical methods are among the most common.

However, here you need to remember what we talked about at the very beginning - not every “squiggle” drawn in the coordinate system is a function! Do you remember? Just in case, I’ll copy here the definition of what a function is:

As a rule, people usually name exactly the three ways of specifying a function that we have discussed - analytical (using a formula), tabular and graphical, completely forgetting that a function can be described verbally. Like this? Yes, very simple!

Verbal description of the function

How to describe a function verbally? Let's take our recent example - . This function can be described as “every real value of x corresponds to its triple value.” That's all. Nothing complicated. You, of course, will object - “there are so complex functions, which are simply impossible to ask verbally!” Yes, there are such, but there are functions that are easier to describe verbally than to define with a formula. For example: “each natural value of x corresponds to the difference between the digits of which it consists, while the minuend is taken to be the largest digit contained in the number’s notation.” Now let's look at how our verbal description of the function is implemented in practice:

The largest digit in a given number is, respectively, the minuend, then:

Main types of functions

Now let's move on to the most interesting part - let's look at the main types of functions with which you have worked/are working and will work in the course of school and college mathematics, that is, let's get to know them, so to speak, and give them brief description. Read more about each function in the corresponding section.

Linear function

A function of the form where, are real numbers.

The graph of this function is a straight line, so constructing a linear function comes down to finding the coordinates of two points.

The position of the straight line on the coordinate plane depends on the angular coefficient.

The scope of a function (aka the scope of valid argument values) is .

Range of values ​​- .

Quadratic function

Function of the form, where

The graph of the function is a parabola; when the branches of the parabola are directed downwards, when the branches are directed upwards.

Many properties of a quadratic function depend on the value of the discriminant. The discriminant is calculated using the formula

The position of the parabola on the coordinate plane relative to the value and coefficient is shown in the figure:

Domain

The range of values ​​depends on the extremum of the given function (vertex point of the parabola) and the coefficient (direction of the branches of the parabola)

Inverse proportionality

The function given by the formula, where

The number is called the coefficient of inverse proportionality. Depending on the value, the branches of the hyperbola are in different squares:

Domain - .

Range of values ​​- .

SUMMARY AND BASIC FORMULAS

1. A function is a rule according to which each element of a set is associated with a single element of the set.

• - this is a formula denoting a function, that is, the dependence of one variable on another;
• - variable value, or argument;
• - dependent quantity - changes when the argument changes, that is, according to any specific formula reflecting the dependence of one quantity on another.

2. Valid argument values, or the domain of a function, is what is associated with the possibilities in which the function makes sense.

3. Function range- this is what values ​​it takes, given acceptable values.

4. There are 4 ways to set a function:

• analytical (using formulas);
• tabular;
• graphic
• verbal description.

5. Main types of functions:

• : , where, are real numbers;
• : , Where;
• : , Where.