Stock Market Basics · Lesson 2
How to read a stock chart
A calm beginner lesson. What that line on the screen actually shows you, how to read it without getting lost — and, just as importantly, what it cannot tell you.
Prefer to watch on YouTube? Open the video in a new tab.
New here? This is Lesson 2. Lesson 1 covers what a share actually is before you look at any chart — start with what you are actually buying →
What this lesson covers
- What the line on a chart actually shows — a price, over a period of time, and nothing more
- How to read the two axes: time along the bottom, price up the side
- Why the same company can look like a disaster or a triumph depending on the time period you choose
- What a chart cannot tell you about the business behind it
The one habit worth building: before you react to the shape of a chart, check what period it is showing you.
Four things to check on any chart
In the order that matters, before you draw any conclusion from what you are looking at.
A day, a year, or ten?
How much movement is that really?
What is the broad direction?
What was happening to the business?
A chart is a record of what people have already paid. It is history, not a forecast. It tells you what happened; it does not tell you what happens next, and it says nothing at all about whether the company is any good.
Where to go next
If you'd like to see these ideas applied to real companies and real results, How Markets Think is where I write that up each week — earnings, deals and market moves, explained in plain English.
General education only
Unlock Futures is operated by Skills Forward Pty Ltd (ABN 81 686 531 484). This lesson is general educational information only. We do not hold an Australian Financial Services Licence and do not provide financial product advice. Nothing here takes into account your objectives, financial situation or needs, and we do not recommend any share, ETF, fund or other financial product. Share values can fall as well as rise and you may lose money, including your capital. Before acting on anything in this lesson, seek advice from a licensed financial adviser. Past performance is not an indicator of future performance.