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IBD Meetup

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IBD Meetup

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  1. IBD Meetup Chart School and Pattern Recognition, Module-1 Chart Construction Presented By Tom Ellis Petaluma, CA April 11, 2012 7:00 – 9:00 PM

  2. Chart School and Pattern Recognition • Differences in Chart Construction between IBD and other services. • What Information is on a stock chart? • High, Low, Close, and Open (not IBD) Prices • Average Closing Price • Daily Charts usually have 50 and 200 Day Moving Averages • Weekly Charts usually have 10 and 40 Week Moving Averages • Volume of Shares Traded • Moving Average Volume • 50 Days on Daily Charts • 10 Weeks on Weekly Charts • Relative Strength of the Stock versus the S and P 500 • Relative Strength, when comparing current stock to all stocks • Tick, Minute, Minutes, Hour, Day, Week, and Monthly Bars • Daily Charts versus Weekly Charts. – Start with the weekly first! • Daily charts are good for finding the details of a stocks action and for finding entries • Weekly charts are used to identify chart patterns and provide a useful summary and a longer term perspective

  3. Chart School and Pattern Recognition Common Price Bars. High Open Last Last Last Open Last Low

  4. Chart School and Pattern Recognition Investors.com Daily Chart RS Rating Comparing to other stocks 50 Day Moving Average 200 DMA Not Shown Relative Strength Line Comparing Stock to the S and P 500 Volume

  5. Chart School and Pattern Recognition Marketsmith Daily Chart TNGO 50 Day Moving Average 200 DMA Not Shown RS Rating Comparing to other stocks Relative Strength Line ComparingStock to the S and P 500 Volume

  6. Chart School and Pattern Recognition esignal Daily Chart Most Charting Software uses construction methods for bars and colors that is a little different from IBD TNGO 50 Day Moving Average 200 DMA Not Shown Volume Relative Strength Line ComparingStock to the S and P 500

  7. Chart School and Pattern Recognition esignal or other Investors.com Marketsmith No Space for Holiday Space for Holiday Space for Holiday Red Red Blue

  8. Chart School and Pattern Recognition Investors.com Weekly Chart 10 Week Moving Average 40 Week Not Shown Relative Strength Line Comparing Stock to the S and P 500 RS Rating Comparing to other stocks

  9. Chart School and Pattern Recognition MarketsmithWeekly Chart 10 Week Moving Average 40 Week Not Shown RS Rating Comparing to other stocks Relative Strength Line Comparing Stock to the S and P 500

  10. Chart School and Pattern Recognition esignal Weekly Chart 10 Week Moving Average 40 Week Not Shown Relative Strength Line Comparing Stock to the S and P 500

  11. Chart School and Pattern Recognition • Primary Differences Between IBD and other charting software • Type of Price Bar • IBD Price Bar uses High, Low, and Close. There is a small difference in how the bar is drawn between Marketsmith and the website. • Most other charting software uses Open, High, Low, and Close. • Color of Price Bar • IBD determines the color of the price bar based on whether the price closes up or down from yesterday. • Most charting software determines the color of the price bar based on whether the price closes up or down from where it opens in the same day. • Handling of Holidays • IBD leaves a space in the chart when there is a holiday. • Other charting software generally does not leave a space on the chart when there is a holiday. • The reason this matters sometimes is it will affect trend lines that are drawn on daily charts.