22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

(https://www.investagrams.com/daily/) 
FEATURED (HTTPS://WWW.INVESTAGRAMS.COM/DAILY/CATEGORY/FEATURED-3/)

HOW TO & ADVICE (HTTPS://WWW.INVESTAGRAMS.COM/DAILY/CATEGORY/HOW-TO-ADVICE/)

Read Between the Lines: A Silent Guide to Interpreting

Charts
Investagrams (https://www.investagrams.com/daily/author/investagrams/)  May 25, 2020 (https://www.investagrams.com/daily/2020/05/read-between-the-
lines-a-silent-guide-to-interpreting-charts/)

As a newbie who wants to delve into trading the financial markets, whenever we do a quick search on the Internet
about trading, most of the time, you will encounter charts involving mostly candlesticks.

If you’re that trader who’s struggling with reading candlestick charts because of the “noise” it eventually generates
causing you to overthink your executions or worse, FOMO, and you wanted an alternative to reading those price
charts, then you might want to continue reading. We are going to talk about one of the most underrated views that
you can use at your disposal – line charts!

Have you ever wondered what kind of charts analysts use on CNBC? If you try to watch some videos on the web then
yes, they mostly use line charts (or some of you might argue mountain charts, but technically they still use lines).

If you’re going to transition from candlesticks to lines, you may need to detach your emotions when looking at
candlesticks. But if you’re a newbie and this is the first time you’ve read about lines, then great, you can read this
coming from an empty cup.

As with any other trading tool, there are advantages and disadvantages of using this chart view so let’s carefully take
a look at them.

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 1/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

Clearer supports and resistances

The struggle I had during my early stages of trading was actually plotting supports and resistances. If you’ve been
following me in the early stages of my trading journey, I used to utilize the Donchian Channels indicator to spot
supports and resistances. So here’s an example of its usage with a period length of 10:

However, the problem with using this is that it might also give false levels causing you to create too many
psychological levels inside your head.

Now let’s see when we view this chart using lines:

That’s better, and cleaner too!

Looking at the last examples will entirely depend on your visual preference. But with enough practice, you will get
used to this.

It’s also easier to draw Fibonacci Retracements as well which brings us to the next advantage of using lines and MY
NUMBER ONE REASON why I prefer using this view over candlesticks.

Lines can serve as your secret weapon for Elliott Waves

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 2/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

What are Elliott Waves? I’m not going to delve in too much on the topic since I know that there are contributors
better than me who can explain more on detail but I will give you an idea on what it looks like just by looking at this
illustration:

Source: babypips (https://www.babypips.com/)

Don’t get me wrong, I know a lot of awesome Elliotticians like Limitless Investor and Javi Medina who use candlestick
charts on drawing Elliott Waves – and yes! I actually tried drawing those waves using the candlestick charts but
guess what? It was a real headache for me!

In the brink of giving up on waves, a short conversation between me and Roy Lacsamana last InvestaSummit 2019
completely changed my approach to charts and it can be summarized in this statement:

“You should try Elliott Waves since you’re a musician, it suits you.”

And I can’t believe he was right! After weeks of figuring out why I was struggling, eventually, I found the reason why I
was personally having a hard time understanding the waves – I was looking at the wrong view!

To put this into perspective, let’s reverse engineer an Elliottician’s chart from Limitless Investor, let’s say you have
this example:

Since this is how I learned to understand Elliott Waves by reading other people’s charts, here is my perspective on
his Elliott count using my custom retracement:

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 3/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

If you compare the two charts, it’s the same view – we’re just using different lenses.

Lines provide pure price action

So far I’ve only found both a pro and a con of using lines – it only gives the closing price. It sounds ironic when you
think about it since the goal of the lines is to minimize the noise that you see in the charts, especially for those
traders who started with candlestick charts.

Bounce and breakout plays can somewhat frighten you as a trader if you rely purely on lines. One way to remedy this
is to look at lower time frames to verify if an area is a support or resistance, but we’ll save that for another post.

Or you can just quickly switch to candlesticks and observe if the last candle shows signs of strength or weakness.

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 4/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 5/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

And yes, big and sharp moves created by lines can also give you hints of gaps when you switch to candlesticks.

If you are planning to transition to lines or a newbie and you feel like there’s still “something missing” in the charts,
there’s actually an indicator that can help you deal with this problem and we will talk about it in the next section.

A Parabolic SAR can be your trusty sidekick as well as your “alternate candle high”
Have you ever got into a dilemma wherein you had a good entry but for some reason, you’ve created these
psychological barriers that prevent you from holding or taking profits?

This is actually the reason why I got rid of A LOT of moving averages and stuck to only ONE moving average – the
200-period moving average.

The Parabolic SAR (Stop And Reverse/PSAR) can serve as an alternate indicator for the rest of the commonly used
moving averages (20, 50, 100) and the signal is pretty straightforward to understand:

When a dot is below the price, it’s an uptrend signal.

When a dot is above the price, it’s a downtrend signal.
It’s a trend-following indicator in a way that you can use the first instance of the change of direction as an entry or
exit signal. How is this an “alternate candle high” you may ask? We’ll make the charts do the talking:

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 6/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

Less is more
The candlestick is not the only view that you can utilize whenever you want to read price charts. There are other
views that you can look at if candlesticks scare you. Sometimes the reason why you can’t execute your trades is
maybe you have a lot of indicators that unconsciously give you noise.

In order to understand what view will suit you in your trading, you should discover what you’re visually comfortable
with especially if you’re in it for the long road.

Anything is an opportunity, you just have to know where to look!

Now go out there and backtest to find out what trading style suits you and stay tuned for the next posts!

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 7/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

Contributor:

(https://www.investagrams.com/Prime/?ir=jjy28954)

Name: Marvin Alec Padua

Investagrams Username: @thetradingcomedy (https://www.investagrams.com/Profile/thetradingcomedy)

Channels:

www.facebook.com/thetradingcomedy (https://facebook.com/thetradingcomedy)

www.twitter.com/alecscorner (https://twitter.com/alecscorner)

www.instagram.com/thetradingcomedy (https://instagram.com/thetradingcomedy)

www.thetradingcomedy.finance.blog (https://thetradingcomedy.finance.blog)

https://tinyurl.com/AlexCornerSpotify (https://tinyurl.com/AlexCornerSpotify)

https://micky.com.au/author/apadua (https://micky.com.au/author/apadua)

About the Contributor:

A self-proclaimed “Lazy Elliottician”, Alec is a former mobile app developer turned independent singer-songwriter
and busker, who goes by the stage name “Alex Corner”. He has a couple of songs on Spotify and other music digital
platforms. A self-taught trader, he also created his own trader persona – “The Trading Comedy”, where he
documents his trading journey in the Philippine Stock Market and beyond. He is currently a finance writer for Micky
News as well as a casual gamer and streamer.

(https://www.investagrams.com/Prime/?ir=jjy28954)

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 8/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

Investagrams (https://www.investagrams.com/daily/author/investagrams/)
Investagrams has helped thousands of Filipinos all over the world on their stock market journey. Now, we’re aiming to help
thousands more! Follow us on InvestaDaily for investing tips and stock market advice to help you reach your first million.

Facebook Twitter Messenger Reddit Copy Link


Previous post Next post

Investa Pro League Round 1 Competition Rules And Mechanics Investagrams Featured Traders of the Week: Eureka Trader and
Jan S
(https://www.investagrams.com/daily/2020/05/investa-
pro-league-competition-rules-and-mechanics/) (https://www.investagrams.com/daily/2020/05/investagrams-
featured-traders-of-the-week-eureka-trader-and-jan-s/)
1 Comment Sort by Newest

Add a comment...

Joed Hernandez
Very interesting take. Thank you for the insight
Like · Reply · 26w

Facebook Comments Plugin

You may also like

NEWS
FEATURED (HTTPS://WWW.INVESTAGRAMS.COM/DAILY/CATEGORY/FEATURED-3/) HOW TO &&ADVICE
FEATURES
(HTTPS:/
(HTTPS:/
/WWW.INVESTAGRAMS.COM/DAILY/CATEGORY/HOW-TO
/WWW.INVESTAGRAMS.COM/DAILY/CATEGORY/NEW

(https://www.investagrams.com/daily/2020/01/featured- (https://www.investagrams.com/daily/2021/03/how-
trader-of-the-month-chart-archer/) to-comeback-from-your-losses/)
Featured Trader of the Month: Chart Archer How to COMEBACK from your losses?
(https://www.investagrams.com/daily/2020/01/featured- (https://www.investagrams.com/daily/2021/03/how-to-
trader-of-the-month-chart-archer/) comeback-from-your-losses/)
Investagrams Investagrams

(Https://Www.Investagrams.Com/Daily/Author/Investagrams/)  January 14, (Https://Www.Investagrams.Com/Daily/Author/Investagrams/)  March 21,

2020 (https://www.investagrams.com/daily/2020/01/featured-trader-of-the- 2021 (https://www.investagrams.com/daily/2021/03/how-to-comeback-from-

month-chart-archer/) your-losses/)

For this month’s featured trader, we would like to highlight a person who Everybody takes a trip to Chinatown at least once in their trading
has consistently provided value to the Investagrams Community.... journey. It is painful to see red numbers in...

READ MORE READ MORE

(HTTPS://WWW.INVESTAGRAMS.COM/DAILY/2020/01/FEATURED- (HTTPS://WWW.INVESTAGRAMS.COM/DAILY/2021/03/HOW-TO-
TRADER-OF-THE-MONTH-CHART-ARCHER/) COMEBACK-FROM-YOUR-LOSSES/)

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 9/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

HOW
FEATURED (HTTPS://WWW.INVESTAGRAMS.COM/DAILY/CATEGORY/FEATURED-3/) HOW TO &
TOADVICE
& ADVICE
(HTTPS:/
(HTTPS:/
/WWW.INVESTAGRAMS.COM/DAILY/CATEGORY/HOW-TO
/WWW.INVESTAGRAMS.COM/DAILY/CATEGORY/HOW

(https://www.investagrams.com/daily/2020/08/bubble- (https://www.investagrams.com/daily/2021/06/third-
wrapped-trading-and-a-few-cliches/) side-of-the-coin/)
Bubble Wrapped Trading and a Few Clichés Third Side of the Coin
(https://www.investagrams.com/daily/2020/08/bubble- (https://www.investagrams.com/daily/2021/06/third-side-of-
wrapped-trading-and-a-few-cliches/) the-coin/)
Investagrams Investagrams

(Https://Www.Investagrams.Com/Daily/Author/Investagrams/)  August 10, (Https://Www.Investagrams.Com/Daily/Author/Investagrams/)  June 23,

2020 (https://www.investagrams.com/daily/2020/08/bubble-wrapped-trading- 2021 (https://www.investagrams.com/daily/2021/06/third-side-of-the-coin/)

and-a-few-cliches/)
As a self-proclaimed bounce specialist, or how my teammates like to call
Growing up as kids we may have found ourselves playing with me, “bounzerizt,” most traders ask me, “Sir how can...
crosswords, and some other visual puzzles that challenge our cognitive...
READ MORE
(HTTPS://WWW.INVESTAGRAMS.COM/DAILY/2021/06/THIRD-SIDE-OF-
READ MORE THE-COIN/)
(HTTPS://WWW.INVESTAGRAMS.COM/DAILY/2020/08/BUBBLE-
WRAPPED-TRADING-AND-A-FEW-CLICHES/)

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 10/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 11/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 12/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 13/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 14/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily

(https://www.investagrams.com/?
utm_source=Footer&utm_medium=ImageLink&utm_campaign=InvestaDaily)

InvestaDaily is the Official Publication arm of Investagrams

About (https://www.investagrams.com/daily/about/)
Terms (https://www.investagrams.com/daily/terms-and-conditions/)
Privacy Policy (https://www.investagrams.com/daily/privacy-policy/)
Contact (https://www.investagrams.com/About/ContactUs)

Tags

8000 peso rule (https://www.investagrams.com/daily/tag/8000-peso-rule/)

beginner (https://www.investagrams.com/daily/tag/beginner/)

best investments (https://www.investagrams.com/daily/tag/best-investments/)

breakdown (https://www.investagrams.com/daily/tag/breakdown/)

breakout (https://www.investagrams.com/daily/tag/breakout/)
candlestick (https://www.investagrams.com/daily/tag/candlestick/)

candlesticks (https://www.investagrams.com/daily/tag/candlesticks/)
charting (https://www.investagrams.com/daily/tag/charting/)

competition (https://www.investagrams.com/daily/tag/competition/)
dating and trading (https://www.investagrams.com/daily/tag/dating-and-trading/)

downtrend (https://www.investagrams.com/daily/tag/downtrend/)
FA (https://www.investagrams.com/daily/tag/fa/)

fundamental analysis (https://www.investagrams.com/daily/tag/fundamental-analysis/)

glossary (https://www.investagrams.com/daily/tag/glossary/)

how to (https://www.investagrams.com/daily/tag/how-to/)
how to read charts (https://www.investagrams.com/daily/tag/how-to-read-charts/)

insurance (https://www.investagrams.com/daily/tag/insurance/)
investagrams (https://www.investagrams.com/daily/tag/investagrams/)

investagrams features (https://www.investagrams.com/daily/tag/investagrams-features/)

Investagrams Trading Cup 2017 (https://www.investagrams.com/daily/tag/investagrams-trading-cup-2017/)

Investajournal (https://www.investagrams.com/daily/tag/investajournal/)
investing (https://www.investagrams.com/daily/tag/investing/)

investment (https://www.investagrams.com/daily/tag/investment/)
mutual funds (https://www.investagrams.com/daily/tag/mutual-funds/)

news (https://www.investagrams.com/daily/tag/news/)
philippine stock market (https://www.investagrams.com/daily/tag/philippine-stock-market/)

resistance (https://www.investagrams.com/daily/tag/resistance/)
risk management (https://www.investagrams.com/daily/tag/risk-management/)

role reversal (https://www.investagrams.com/daily/tag/role-reversal/)

stock charts (https://www.investagrams.com/daily/tag/stock-charts/)

stock market (https://www.investagrams.com/daily/tag/stock-market/)

Stocks (https://www.investagrams.com/daily/tag/stocks/)

stock trading (https://www.investagrams.com/daily/tag/stock-trading/)

strategy (https://www.investagrams.com/daily/tag/strategy/)

support (https://www.investagrams.com/daily/tag/support/)
support and resistance (https://www.investagrams.com/daily/tag/support-and-resistance/)

TA (https://www.investagrams.com/daily/tag/ta/)
technical analysis (https://www.investagrams.com/daily/tag/technical-analysis/)

tips (https://www.investagrams.com/daily/tag/tips/)
trader's life (https://www.investagrams.com/daily/tag/traders-life/)

trading (https://www.investagrams.com/daily/tag/trading/)
trading strategies (https://www.investagrams.com/daily/tag/trading-strategies/)

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 15/16
22/9/21 21:55 Read Between the Lines: A Silent Guide to Interpreting Charts - InvestaDaily
trends (https://www.investagrams.com/daily/tag/trends/)
uptrend (https://www.investagrams.com/daily/tag/uptrend/)

virtual trading (https://www.investagrams.com/daily/tag/virtual-trading/)

Subscribe to Our Newsletter

Join our mailing list for investing tips and stock market advice to help you reach your first million.

Email

SUBSCRIBE!

Copyrights © 2017 Investagrams. All Rights Reserved.

  

(https:/
(https:/
/facebook.com/investagrams)
(https:/
/twitter.com/investagrams)
/plus.google.com/+Investagramss)

https://www.investagrams.com/daily/2020/05/read-between-the-lines-a-silent-guide-to-interpreting-charts/ 16/16