How To Read Bar Charts

How To Read Bar Charts

The Beginner Trader

How to read a bar chart

Before you can read a full bar chart with all those confusing lines and indicators, you need to know what a bar is made up of and what each individual bar tell us. So let’s start with the basics. 

What is a bar chart?

A bar chart as it relates to a stock, gives us information on the price of a stock on a given month, week, day, hour, minute, or even second. The time frame you choose depends on what your strategy requires which we will not get into in this post. The chart is made up of multiple bars. Learning how to read a single bar is the first step in learning how to read the charts and look for patterns that will fit your future trading strategies.

What do the bars signify?

A single bar will give you 4 main points of information. A bar is made up of a body and (usually) one or two wicks. Although it is possible to have candle with no wicks. The color of the body tells you if the price went up or down during the time period that bar lasted. A red candles signifies the bar closed lower then it opened, or went down. A green candle tells you the opposite.

The 4 points of information a candle gives you:

  • The price the bar opened
  • The price the bar closed
  • The high of the candle
  • The low of the candle

Check out the images below and see if you can spot the one difference that would make a candle red or green. Do you see it?

Understanding these concepts is one of the first steps in learning how to read a chart. When you combine multiple bars together you will start to see patterns. When you take those patterns and add other indicators to your charts, you will start to get buy and sell signals. We will get into these patterns and strategies in future posts.

Red Candle - Stocks Charts
Green Candle - Stocks Charts

October 2020: Investment Update

October 2020: Investment Update

My Investment Tracker – October 2020

From time to time I will be posting updates on my trading accounts. My P&L, current holds, and what I am thinking about moving forward. I am still in the learning process and trying out different strategies hoping to really hone in on 2 to 3 strategies that I can master. I started my IRA with $2800 in December 2018, and my brokerage account with $3500 in early 2020. Not included in the numbers below are my BTC holdings and general savings.

My IRA (US Dollars)

Brokerage Account

Below are the overall results from my past 60 days of trading. I had been cruising at around 90% P&L for a little while, but finally sold off some losing positions to start to bring my numbers back to a more normal range. I am still working on getting rid of losers faster, as you can tell.

Biggest Gainers (%)
$TSLA: +97%
$PLUG: +20.6%
$GRWG: +15.71%

Biggest Losers (%)
$PRVB: -30%
$SLDB: -22%

Long terms holds: $TSLA, $NOBL
Short term holds: $GE, $PLUG
Speculative play: $RLFTF – my first venture into penny stocks. We’ll see how this goes.

Lessons learned: Both PRVB and SLDB were dumb holds on my part. They didn’t need to be such big losses in terms of percentage. I think because I am still not playing with huge sums of money, I tend to let the losers go a while thinking “it’s okay, it’s only $x dollars, not too bad” but I have to be more disciplined and remember that every little bit counts. Most of the losing trades came from my brokerage account, which brought me back nearly to where it had started. 

Always do your own investment research. My website is not meant to be investment advice. It’s just a way for me to track and keep accountable as well as to share my knowledge and experience. 

60 Day Results - All Accounts

My History With Money and Investing

My History With Money and Investing

I haven’t been great with money…

That could be the main theme of my 20’s and early 30’s. Money was never important to me in the sense of building wealth and saving for the future. Part of the reason was that I never had a mentor to guide me on how money worked. As you can see on my “about me” page, I grew up with a single mom who did her best to keep food on the table. While the succeeded in doing so, money, was never her specialty. Budgeting…yes. Saving…a little. But investing and using your money to make money was not on her radar, and rightfully so.

 

My first money mistake

Looking back, I think the first major mistake I made was not understanding how to save money. Making money was never a problem. Not saving money was the problem. I was always more of a “live for the moment” type of person. I would worry about the future when it got here. I would spend money on things I wanted. I would buy things for friends. I even bought sports car that I probably shouldn’t have, although, that was fun. I suppose that may be true of most kids in their late teens and early 20’s.

If you are young and starting to get into the workforce, hopefully my life story will help you avoid the same pitfalls. If I had set aside a small percentage of my paychecks, say 5%, from when I started working full time until today — I would likely have bought a house by now…IN THE BAY AREA. No small feat, I can assure you. I’ll talk more about savings accounts and how to use them in future posts.

 

Not understanding credit cards or credit scores.

This one really came back to burn me in my first years of adulthood. I think the saving grace was that I screwed up when I was 19-20, so I had time to recover from my mistake. As soon as I turned 18, I started getting offers for credit cards. By the time I was about 19 I had two cards in my name. They didn’t have large credit lines, but it was enough to get me in trouble. One card had a max of $1000. I think the other had roughly the same, maybe $1500. I can’t remember anymore.

I know what you’re thinking. Did I think I really had $1000 to spend? Typically that’s the problem young people run into with their first credit cards. They think they actually have that money. That wasn’t my issue. I think in theory I understood that I didn’t have that money and I needed to pay it back. In practice however…well, I failed. I maxed out one card on a weekend getaway with a girl I was trying to impress. I maxed out the second one on what was probably needless purchases. I was making minimum payments and I thought it was fine. Then…bam! A mistake at work cost me my job, and I fell behind on payments. Worse yet, I wasn’t very organized with my finances, so even keep track of what was happening was a mess. I fell behind on payments, the fees piled up, and I couldn’t afford to make the payments.

Eventually, I settled with the card companies and paid them back a portion of what was due. My credit was ruined for years. It was about the time I settled with the card companies that I found out about credit scores, what they were, and how they worked. At one point my credit score was down in the 500’s. It took my 7 years to get my score above 700. Today my score is excellent and I have ZERO debt. I pay my cards off every month and collect the rewards. 

If you are unfamiliar with how credit scores work,  you should read this

In retrospect the most frustrating part was how I let myself get into so much financial trouble over such a small amount. You live, you learn. I’ll talk more about how to use credit card properly in future posts.

 

Investing…or lack thereof

This might be my biggest sin of all. Growing up I never heard about investing, stocks, bonds, markets, charts, etc. It wasn’t even a foreign language, it just didn’t exist in my house. I did like to watch the news, so by my teen years I was aware of the stock market, but outside of knowing it existed, I had no idea how it worked. I thought it was something rich people did. Knowing what I know now…HURTS…it just hurts. lol. But I can’t let that stop me from moving forward and doing the right thing.

In my late 20’s I took a job as a professor at a local community college. It was the first job I had that offered a retirement plan where they matched my contribution. I signed up for it because it sounded like the right thing to do, and then I forgot about it. I spent a couple of years at that job, and in that short amount of time I had built up a little under $2000 in a Calstrs account. Calstrs is the retirement plan for teachers in the state of CA. I quit my job in 2011 to join my wife working full time on growing our business. That ended up being a great move, but with the business we didn’t have any investments or 401k options setup. We were just reinvesting everything into the business in those first years.

After making that move I started to think more about investing, retirement, and how I would achieve it. We had two young boys, and a thriving business. With most of my focus on those two aspects of my life, I still didn’t take the time to focus on investing. Luckily I had that small nest egg from Calstrs just sitting there, growing, without me doing a thing.

In late 2018 I finally took the time to research investments. Our CPA had been asking us why we hadn’t been putting away money for years. I finally listened. I went back to look at my Calstrs account. I figured I could just keep adding to it now that I was able to. When I called to set that up, I learned that I couldn’t contribute to it since I was no longer employed by the state. I looked at my options and decided to move my money to an IRA with Schwab. (I’ll get into different brokerage accounts and companies in future posts). It was a small account by most standards, but it was mine, and I could now do something with it. In December of 2018 I opened my IRA with about $2500.

Now, 18 months later, I have my IRA, my day trading account, and some money in Bitcoin. All together my investments went from $2500 to just over $20,000 in just 18 months. I am KICKING MYSELF for not doing this sooner, but it’s time to focus on the future. My journey is just beginning. Don’t wait to start yours.

Carlos Chapeton

NOTE: My blog is not investment advice. I am not affiliated with or get paid from any business I mention in my posts. These are merely a record of my investment journey as told by me. Before investing you should do your own research and decide which investment options are right for you.

 

 

 

Living with Covid-19

Living with Covid-19

My Experience With Covid-19

It’s almost the end of July. Summer is in full swing or at least what we used to consider summer. Time seems to be meaningless in 2020. I’m not always entirely sure which day it is, let alone what season we are in. We have been living with the threat of Covid since February. We had to shut down our business in March and we have been in full “stop the bleeding” mode since.

Living in the Bay Area, specifically in San Mateo County, I felt relatively safe. Our case numbers have always remained low when compared to surrounding areas. I don’t know anyone who has come down with the virus either. We have been smart the past few months. We have quarantined at home, ordered our groceries online when we can, and most difficult of all, we had to stop visiting my parents. Both of whom are considered high-risk. My mom had open heart surgery a few years ago. My step dad was diagnosed with heart failure and nearly died while we were in shelter-in-place. Thankfully he has (mostly) recovered, and neither of my parents have come down with the virus. 

Despite all our best efforts, a few weeks ago my wife and I both started to feel ill. I think we both knew right away, we just didn’t want to say it. My wife is a dancer and knows to listen to her body when something is wrong. I have only had a flu a couple of times in my adult life. The last time I was down with the flu was the day my second son was born 7 years ago. 

So back on July 7, when my body started to feel achy, I knew something was up. I tried to ignore it, just went about my days. It wasn’t a strong illness, but I definitely had something. By Friday, July 10 I had a fever of 101.5 degrees. My wife had also had a fever, but hers lasted less than 2 days, and she had already been fever free for more than 24 hours. I would have to deal with my fever for a lot longer. It’s likely I had a fever the day before, but I didn’t check it until that Friday. From there I would go a whole week, with a mild fever that ranged from 99.5 to 101.5. It wasn’t bad, but it was annoying. I was fatigued and had to rest for most of that time. Medicines seemed to not do anything. I tried DayQuil, Tylenol, IB Profin. Nothing. No response. The fever persisted. 

Eventually I conceded to the fact that I would just have to wait it out. My wife had insisted we get tested. We called Kaiser, our health care provider on Thursday July 9. The earliest available appointment to get tested was Tuesday July 14th. Seeing as how we had gotten symptoms the previous Tuesday, there was a good chance we wouldn’t get results until after our quarantine had passed. That’s exactly what happened. 

My wife’s test came back on July 18. Positive. We were still in a bit of disbelief despite having a feeling that would be the result. My test didn’t come back until the following Monday. Also positive. By then I had been fever free 72 hours. And it had been almost two weeks since my first sign of symptoms. It would be another couple of days before the doctor’s reached out, and eventually the county health department. By then it was too late. We were done with the quarantine period, and had been given the all clear by our doctors. 

The Testing And Tracing Systems

When we started feeling ill, we were on a short road trip “vacation” to  a cabin in the woods by a lake. We were there to go swimming and to quarantine somewhere other than our house. We didn’t bump into people while we were there, but maybe I got it touching a gas pump? Or maybe the house we rented still had traces of the virus from the previous occupants? We will never know.

This is the part that made us realize just how bad our current testing system is. We had been playing it smart. We knew something was wrong, and we immediately self quarantined. What would’ve happened if we didn’t though? We could have been going about our daily routines with the virus. Potentially infecting others while we waited for results. I won’t be making any political statements here, but hopefully the testing situation improves in this country, and fast. 

I could also see how tracing was impossible to do at the pace the county was moving. I just got a call from the county health department to follow up on the positive test on July 23, 2020. That’s over 2 weeks after the onset of symptoms. What can the county do by then? Nothing. The only thing they could do was ask about symptoms and get our info. While we knew we had limited contact with people over the 2 weeks leading to our symptoms, there was no way to know where or how we got it. 

We Got The Virus. Now What?

With so much emphasis on NOT getting the virus over the past few months, we never stopped to think what would happen after we got it. Being young and healthy meant that we recovered and weren’t hit too hard. Our kids seem to have gotten through it without any symptoms. So in a sense we dodged the bullet. 

Which brings me to today and the part of this people or the media don’t talk about as much. What happens after you recover? I feel like most people we have told about our diagnosis want to make most space from us now. Which isn’t actually necessary. As our doctor reminded us, we may now be the safest people to be around. We can now go about our daily lives without living in fear. We can’t catch it again (at least not for a while – I know research is still on going) and we can’t pass it on to anyone.

That doesn’t mean we stop wearing masks or stop social distancing, but it does mean we can ease our minds a bit. We can also go visit my parents again, which is going to be great for them and my kids. Now we just need to remind our friends to get over the stigma and realize we are safe to be around.

While this story may reinforce some people’s beliefs that this virus isn’t a big deal, that is not at all the point I was trying to make. We just got lucky. You don’t know how the virus will hit you, and there is no vaccine or treatments (yet) that will save you in a worse case scenario. Continue to be safe out there, continue wearing your masks, and continue to social distance.