Chapter 5 · Reading the price screen
Reading a chart honestly
Timeframe changes the story. The same stock can look strong and weak at once.
A chart is a picture of price over a chosen period. Change the period and the picture changes — often to the opposite conclusion. This is not a flaw; it is what happens when several trends run at once, which is Dow's first observation from Chapter 7.
What one candle records
Each candle records four numbers for its period. On a daily chart, one candle is one session. On a weekly chart, one candle is a whole week and all that daily detail disappears.
Chapter 7 covers what to do with charts. This lesson is only about not misleading yourself with them.
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