Charting & Indicators

Reading a chart, and what each indicator is and is not telling you.

94 articles in this section of the Journal, grouped by topic. Every one is free to read.

Charting 69

ADX Below 20: The Reading That Says Don't Trend-TradeADX measures trend strength, not direction — and a reading below 20 is a clear message: there's no trend, so trend-following setups will chop you up.
ATR-Based Expected-Range Framing for a 0DTE SessionATR of the daily bar gives you a rough expected range for the session — how far SPY typically travels in a day.
Absorption on the Tape: When Heavy Selling Doesn't Move PriceAbsorption is when heavy selling (or buying) hits the tape but price barely moves — a large passive player soaking up the flow.
Anchored VWAP From a CPI or FOMC Print: Where the Real Cost Basis SitsAnchoring VWAP to the moment of a major print — CPI, FOMC — plots the average price of everyone who traded on the news.
Anchored VWAP From the Day's Low: A Dynamic Support Line for ScalpsAnchoring VWAP to the session low gives you a rising, volume-weighted support line that tracks the average price of everyone who bought since the bottom.
Anchored VWAP From the Prior-Day High: Reading Overhead SupplyAnchoring VWAP to the prior-day high plots the average cost of everyone who bought near the top — a line of overhead supply that acts as resistance until price reclaims it. Here's how to read it.
Anchored VWAP From the Yearly Open: The Big-Picture LineAnchoring VWAP to the yearly (or quarterly) open gives you the average price of everyone in the market this year
Change of Character (CHoCH): Spotting the Intraday TurnA change of character is the first break against the prevailing trend — the earliest structural sign a trend may be reversing.
Choosing Your TimeframeYour trading timeframe — scalping, day trading, swing, position — should match your available time, temperament, and capital, not the other way around.
Confluence in TradingConfluence is when multiple independent signals point the same way at the same spot — a level, a trend, a trigger all agreeing.
Dark Cloud & Piercing LineDark cloud cover is a two-candle bearish reversal at a top; the piercing line is its bullish mirror at a bottom.
Engulfing Patterns, ExplainedA bullish or bearish engulfing candle fully swallows the prior candle's body — a visible shift in control. Here is how they form, why they carry weight, and where they fail.
Equal Highs and Equal Lows as Liquidity TargetsWhen SPY leaves two or more highs (or lows) at the same price, it builds a pool of resting stops there — a magnet for a liquidity sweep.
Exhaustion vs. Continuation Volume Spikes on SPYA volume spike can mean two opposite things: exhaustion (a climax that ends a move) or continuation (a breakout that fuels one).
Hammer & Hanging ManThe hammer and hanging man look identical — a small body with a long lower wick — but mean opposite things depending on the trend. Here is how to read them and why confirmation matters.
Hidden RSI Divergence: Reading Trend ContinuationMost traders only know regular RSI divergence (a reversal signal). Hidden divergence is the opposite
High-Volume Nodes as Intraday Magnets and StallsA high-volume node is a price where heavy trading occurred — a shelf of agreement that acts as a magnet and a place price stalls.
How to Draw Trend LinesA trend line connects a series of higher lows (uptrend) or lower highs (downtrend) to visualize direction and find dynamic support/resistance.
How to Read a CandlestickEach candlestick shows four prices - open, high, low, close - in one shape. Here is how to read candles, what the body and wicks tell you, and why patterns are context, not prophecy.
Inside Bars and Outside Bars on the 5-Minute SPY ChartAn inside bar signals compression and a coiling market; an outside bar signals expansion and often a reversal.
Linear Regression Channels for Intraday TrendA linear regression channel draws a best-fit line through price with parallel deviation bands
Liquidity Sweeps at Prior-Day High/Low, ExplainedA liquidity sweep is when price spikes just past an obvious level — the prior-day high or low — to trigger the stops resting there, then reverses.
Low-Volume Nodes as Fast-Travel Zones on SPYA low-volume node is a price range where little trading happened — and price tends to move through it fast, because there's little to slow it down.
Morning & Evening StarThe morning star and evening star are three-candle reversal patterns built around a small-bodied middle candle. Here is how they form and why the gap-and-recover structure matters.
Multi-Timeframe Confluence: Aligning the 1m Entry With the 5m TrendThe highest-odds scalps happen when your entry timeframe agrees with your trend timeframe — a 1-minute trigger in the direction of the 5-minute trend.
Multiple Timeframe AnalysisMultiple timeframe analysis means aligning your trade with the trend on a higher timeframe while timing entries on a lower one. It stops you from fighting the bigger picture. Here's how to do it.
Pivot-Point Confluence With Dealer Levels: When Math Lines AgreePivot points are formula-based support/resistance from the prior day's range. When a pivot lines up with a dealer level, two independent methods agree
RSI Divergence at a Dealer Level: When the Indicator Confirms StructureRSI divergence on its own is a weak, oft-failed signal. But RSI divergence forming right at a mapped dealer level is different
Reading Delta Divergence at Session Highs and LowsDelta measures net buying vs selling volume. When price makes a new high but delta doesn't, the move is running on fumes
Reading Price Action Around SPY's 5-Point Round NumbersSPY reacts at round numbers — especially 5-point levels — because that's where options open interest, orders, and attention cluster.
Reading Relative Strength: SPY vs. QQQ IntradayComparing SPY to QQQ intraday reveals which index is leading and whether the move has broad support
Reading VWAP Slope as a Quick Intraday Trend GaugeThe slope of VWAP — rising, flat, or falling — is a fast, no-indicator read on the day's trend. A steep VWAP means a trend day; a flat one means chop.
Reading Wick Rejection at a Mapped LevelA long wick at a level is price testing it and getting rejected — the clearest single-candle tell of a defended level.
Reading a Composite Volume Profile Across the WeekA composite volume profile combines several sessions into one — revealing the week's real high-volume shelves and low-volume gaps, the levels that matter…
Reading the Cumulative TICK for Intraday BiasThe NYSE TICK measures how many stocks are ticking up versus down right now; the cumulative TICK sums it through the day for a read on underlying buying…
Reading the Opening Range Against Pre-Market High/LowThe opening range and the pre-market high/low together tell you whether the cash session is confirming or rejecting the overnight move.
Session VWAP vs. Anchored VWAP: Which to Trust IntradaySession VWAP resets each day and anchors to the open; anchored VWAP starts from a point you choose.
Single Prints in Market Profile: Where Price Moved Too FastSingle prints are thin areas in the market profile where price moved so fast it left almost no trading
Spinning Tops & MarubozuA spinning top has a small body with long wicks (indecision); a marubozu is all body with no wicks (total conviction). Here is what these two opposite candles tell you about who's in control.
The 1-Minute vs. 5-Minute Chart for 0DTE: Which Timeframe LeadsFor 0DTE scalping, the 5-minute chart sets the structure and trend while the 1-minute times the entry.
The 9/21 EMA Cross for Intraday SPY: Signal or Noise?The 9/21 EMA cross is a popular intraday trend signal — and a lagging one that whipsaws in chop.
The Accumulation/Distribution Line, ExplainedThe Accumulation/Distribution line is a cumulative volume-flow indicator that tracks whether a security is being accumulated (bought) or distributed…
The Advance-Decline Line vs. SPY: Confirming a MoveThe advance-decline line tracks how many stocks are advancing versus declining — market breadth.
The Aroon Indicator: Measuring Trend OnsetThe Aroon indicator measures how recently price made a new high or low — a read on whether a trend is starting, running, or fading.
The Break of Structure (BOS), Applied to SPY IntradayA break of structure is when price breaks a prior swing high or low in the trend's direction — confirming the trend continues.
The Chaikin Money Flow (CMF), ExplainedChaikin Money Flow measures buying and selling pressure by combining price position within each bar's range with volume.
The Doji, ExplainedA doji forms when a candle opens and closes at nearly the same price — a snapshot of indecision. Here is what it signals, the main variants, and why context decides its meaning.
The EMA Ribbon on SPY: Reading Trend Slope at a GlanceAn EMA ribbon — several exponential moving averages stacked together — turns trend and momentum into a visual you can read instantly.
The Failed Auction: Reading a Rejected Breakout at Range ExtremesIn market-profile terms, a failed auction is a breakout beyond a range extreme that gets rejected and pulled back inside
The Harami, ExplainedA harami is a two-candle pattern where a small candle sits inside the prior large one — a sign momentum is pausing.
The Initial Balance in Market Profile: Framing the SPY DayIn market profile, the initial balance is the first hour's range — and how price extends beyond it frames the whole day as normal, trend, or neutral.
The Micro-Pullback Pattern in a Fast SPY TrendIn a fast, strong trend, price barely pulls back — a one- or two-bar micro-pullback is all you get before it resumes.
The Opening Range as a Volatility Gauge, Not Just a Breakout TriggerMost traders use the opening range only for breakouts. But its width is a read on the day's volatility
The Order Block Concept for SPY Scalpers (Used Honestly)An order block is the last opposing candle before a strong move — a supply or demand zone where institutions likely positioned.
The Rate of Change (ROC) Indicator, ExplainedThe Rate of Change indicator measures the percentage change in price over a set number of periods — a pure momentum reading.
The Supertrend Indicator: What It Does and Its LimitsSupertrend is an ATR-based trend-following indicator that flips between support and resistance to keep you on one side of a trend.
The TTM Squeeze: Bollinger-Keltner Overlap, ExplainedThe TTM Squeeze fires when Bollinger Bands contract inside the Keltner Channels — signaling volatility compression that often precedes an explosive move.
The Three-Bar Reversal Pattern on SPY, ExplainedThe three-bar reversal is a simple, objective candle pattern that marks a potential turn: a push in one direction, a stalling bar, then a strong reversal…
The Vortex Indicator, ExplainedThe Vortex Indicator uses two oscillating lines (VI+ and VI-) to identify the start and direction of a trend through their crossovers.
The Williams %R Oscillator, ExplainedWilliams %R is a momentum oscillator that measures where price sits within its recent range — flagging overbought and oversold conditions.
Three White Soldiers & Black CrowsThese three-candle patterns show sustained, one-sided momentum — three strong closes in a row. Here is what they signal, why they're more convincing than single candles, and where they can exhaust.
Top-Down AnalysisTop-down analysis works from the big picture inward — market, then sector, then instrument, then setup
Trading the Naked Point of Control From YesterdayThe point of control is the price where the most volume traded. When yesterday's POC is left untested ('naked'), it acts as a magnet the next day
Tweezer Tops & BottomsTweezer patterns are two candles that share almost the same high (top) or low (bottom) — a double rejection of a level. Here is how they form and why the matching extreme is the signal.
Using ATR to Set a Scalp's Stop Distance on SPYA fixed stop is wrong on most days — too tight when volatility is high, too loose when it's low.
VWAP + 9 EMA Confluence for Trend-Pullback EntriesWhen VWAP and the 9 EMA sit close together in a trend, a pullback into that zone is a high-odds continuation entry — two dynamic support lines stacked.
VWAP Bands (1σ/2σ): Reading Stretch and Reversion on SPYVWAP bands plot standard-deviation envelopes around VWAP, marking how stretched price is from fair value.
Volume Climax: Reading the Spike That Ends a MoveA volume climax is a massive volume spike at the end of an extended move — capitulation or euphoria that exhausts the trend and precedes a reversal.
Why Indicators Confirm, Don't PredictEvery indicator is math on past price, so it lags — it can confirm what's happening, but it can't predict what's next.

Indicators 16

ADX, ExplainedThe ADX measures how strong a trend is — not its direction — on a 0-100 scale. Here is how to read it alongside the DI lines and why it keeps you from fighting trends.
Anchored VWAPAnchored VWAP measures the volume-weighted average price from a specific event you choose — an earnings date, a swing low, a session open. Here is why anchoring makes VWAP far more powerful.
Donchian ChannelsDonchian Channels plot the highest high and lowest low over a lookback period — the original breakout indicator behind the Turtle Traders. Here is how they work and why simplicity is the point.
Keltner ChannelsKeltner Channels wrap a moving average in bands set by ATR (true range), not standard deviation. Here is how they differ from Bollinger Bands and why the ATR basis makes them smoother.
Moving Averages, ExplainedA moving average smooths price into a trend line. Here is the difference between simple and exponential moving averages, how day traders use them, and why they lag.
On-Balance Volume, ExplainedOBV is a running total that adds volume on up-days and subtracts it on down-days to track buying vs selling pressure. Here is what it reveals and why divergence is the point.
Pivot Points, ExplainedPivot points are pre-calculated support and resistance levels derived from the prior period's high, low, and close. Here is how they're built and why so many traders watch them.
The CCI, ExplainedDespite the name, the CCI is a momentum oscillator used on any market to flag overbought/oversold extremes and trend strength. Here is how it works and why its unbounded scale trips people up.
The Ichimoku CloudIchimoku is an all-in-one system that maps trend, momentum, and support/resistance with a shaded 'cloud.' Here is what its five lines do and why the cloud is the core.
The Money Flow IndexThe MFI is like RSI but volume-weighted — a momentum oscillator that factors in how much money moved, not just price. Here is what that adds and why divergence is its strongest signal.
The Parabolic SARThe Parabolic SAR plots trailing dots above or below price to signal trend direction and potential stop-and-reverse points. Here is how it works, its trailing-stop use, and why it whipsaws in chop.
The Stochastic OscillatorThe stochastic oscillator measures where price closes within its recent range on a 0-100 scale. Here is how it works, what %K and %D mean, and why it whipsaws in trends.
What Are Bollinger Bands?Bollinger Bands wrap a moving average in two volatility-based bands that expand and contract with the market. Here is how they work, what a 'squeeze' signals, and why touching a band is not a signal.
What Is ATR?Average True Range measures how much an instrument typically moves in a period. Here is how it's calculated, why it's a volatility gauge not a direction signal, and how to size stops with it.
What Is MACD?MACD tracks the relationship between two moving averages to show momentum shifts. Here is how the MACD line, signal line, and histogram work - and why crossovers lag.
What Is RSI?RSI measures the speed and size of recent price moves on a 0-100 scale to flag overbought and oversold conditions. Here is how the Relative Strength Index works and where it misleads.

Chart Patterns 9

Bull Flags & Bear FlagsA flag is a brief pause inside a strong trend before it continues. Here is how bull and bear flags form, why they work when they do, and the trap of trading them in chop.
Double Tops & Double BottomsA double top is two failed attempts at the same high; a double bottom, two held lows. Here is how these reversal patterns work, and why the second test is the tell.
The Cup & HandleThe cup and handle is a bullish continuation pattern shaped like a rounded base followed by a small pullback. Here is how it forms, why the handle matters, and the skeptic's caveat.
The Head & Shoulders PatternHead and shoulders is a classic reversal pattern - three peaks with a neckline. Here is how it forms, why the neckline break matters, and the honest limits of pattern trading.
The Pennant, ExplainedA pennant is a small symmetrical consolidation after a sharp move — a brief pause before continuation. Here is how it differs from a flag and why the pole matters.
The Rectangle PatternA rectangle forms when price bounces between horizontal support and resistance — a range. Here is how to trade the range vs the breakout, and why most breakouts from a rectangle fail first.
The Rounding BottomA rounding bottom is a slow, U-shaped base that signals a gradual shift from selling to buying. Here is how it forms, why the volume pattern confirms it, and why patience is the theme.
Triangle Patterns, ExplainedTriangles form as price coils into a tightening range before a breakout. Here is how ascending, descending, and symmetrical triangles differ - and why the coil matters more than the label.
Wedge Patterns, ExplainedWedges are converging trendlines that tilt with the trend — and they often signal reversals. Here is how rising and falling wedges differ and why they can be counterintuitive.