If you look at a stock chart for the first time, it looks like an attempt to interpret hieroglyphs from some alien civilization. Do not be scared; it is just a picture of human emotions within some period of time.
The vertical axis is the thermometer, which is used for measurement of the stock temperature. The horizontal axis is the same as the clock, measuring days, months, or even years. All the lines show the struggle between buyers and sellers.
The rising line shows the winners among buyers, and there are many positive emotions within the atmosphere. The descending line tells us about the victory of the sellers, and everybody is eager to get out of the room. It seems obvious, but it is everything you should focus on initially.
The volume bars are the small columns which are situated at the bottom of the chart. They are used to show the degree of noise from the crowd while the price of the stock is changing. The big volume during the increasing price of the stock is the indicator of the high level of confidence of buyers.
The small volume during the rising of the price of the stock is a signal that the party consists of three guests, and the trend may change in the nearest time. The volume bar is a lie detector of the stock price.
The Moving Averages are the jagged lines on the chart that are helpful in smoothing the chaos a little bit. The 50-day and 200-day average lines are the most common among the traders. The going up of the short-term average line above the long-term average one shows the possibilities for the rally.
This crossover is called the “Golden Cross” by the market admirers. Conversely, the “Death Cross” sounds horrifying, since it always forebodes the downfall of some particular stock. Do not be afraid of such terms and go away from the market.
Remember that the stock chart is the historical book, not a crystal ball, forecasting the future. It can be helpful in detecting some trends, but you should not find anything magical here. Just try to watch the daily movements of the stock price of the companies like Apple or Tesla.