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A Simple Easy Way To Interpret Stock Charts For Maximum Profit.

By Gregory Mannarino
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Copyright 2016

ISBN 978-1-329-90884-0
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If you are passionate about something never give up.

Gregory Mannarino
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Let me ask you

Do you believe it is possible to overcome long odds?

Are you the type of person who understands that in order to be successful at anything you have
to be willing to push the edge of the envelope and beyond?

If you answered yes to the two questions above, you possess a rare quality and just might have
what it takes to make it as a successful Wall Street Trader.

Being a Trader means that you will have to put in long hours not just understanding how to
interpret technical data, but also gaining a perspective into global economics. If you are
willing to do this the financial reward can be great. The material you are about to go over can
literally transform your life, you can become your own boss, and live the life you want.
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Table of contents.

Chapter 1: page 6, Getting Started.

Chapter 2: page 9, Chart Interpretation.

Chapter 3: page 14, Patterns.

Chapter 4: page 18, The Keys to Becoming a Successful Trader.

Chapter 5: page 25, Important Indicators.

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Chapter 1.

Getting Started.

Trading is an art form in many ways, and one must realize that the expected outcome of a
situation (a trade in this case) has the potential to turn on a dime. The reason for this is simple:
as a Trader you are basing your current thinking on incomplete information. You will never be
able to assimilate every bit of information with regard to a particular trade, and new
information is constantly coming in. With that said you must also be willing to accept that you
may be wrong with your interpretation of a given trade. Many a Trader has gone broke
because he was simply not willing to accept that despite what all the data is telling him, he got
the trade wrong.

Remember this: your first loss is always the smallest. What that means if you were fully
expecting stock XYZ to go one way and it didnt, be willing to close the trade and take an initial
small loss, because the next loss will more than likely be much larger.

As a Trader you must have a plan, in fact in any endeavor whatsoever having a defined strategy
is critical. The number one reason why 99% of prospective traders fail is simple, they lack a
viable strategy and are unwilling to put in the time to develop a winning situation.

The excerpt below can be found on my website TradersChoice.net (in my opinion an invaluable
free resource for prospective traders like yourself).

Trading the Markets: Winning Strategies Explained.

Developing a winning system when it comes to trading can be a daunting task.

In my opinion the first rule for developing a viable plan for trading is simple: take the opposite
side of the trade.

Think of it this way.

When the crowd is overly bullish on a particular asset, who is left to buy?
The converse is also true. When the crowd is over bearish, who is left to sell?
The second rule to know is this: the market always over-reacts one way or the other.
For example: good economic news may vault stocks higher only to give back half the next day.
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Taking the opposite side of the trade is tough, as it goes against what most people think is
right, and this type of thinking is also why 99% of traders fail.
Did you know you can be wrong more than 50% of the time as a trader and still make money in
this market?
Please allow me to briefly outline how this is possible, and it comes down to a few simple
steps.
Lets break down a particular trade.
For example: you are looking to buy calls on stock XYZ. Most people will simply take a sum of
money and push it all in-WRONG!
You would take HALF of the total sum you are thinking of investing and enter your position.
In this manner if your trade goes against you, by closing the position you lose the minimum.
Now lets take this up a notch.

You enter your half position and the stock begins to move in the direction you want, now you
can add to that position.
By entering a small initial position you minimize your losses, and by adding to a position which
is moving in the direction you want, you maximize your gain!

Utilizing these strategies you can be wrong MOST of the time and STILL make money trading.

Lets look at a few more ways to make your trades successful.

Dont try to compete in the very short run: day trading.
Day trading may sound sexy, and there may very well be times when you enter and close a
position in a single trading day, but trying to enter and exit positions on a daily basis is almost
invariably a losing endeavor.
Think in terms of weeks.
Anything can happen in these markets with short periods of time, hours to days.
For me I take this approach, weeks.
Again, thinking more in terms of short term investments. Allowing your trades to develop is
key to a winning strategy.
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I am an options trader who holds positions in terms of weeks allowing my trades the time
needed to overcome the shorter term volatility. As such, I buy options with at least a 3 month
out expiration date. In this manner I allow my trades the time they need to play out correctly.
Happy trading!

In truth the above segment is the key to executing a successful trading strategy, I suggest you
read it several times.
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Chapter 2.

Chart Interpretation.

In this next segment Im going to outline how to interpret charts, this is the KEY to executing
profitable trades. Every successful trader must put in a lot of hours looking at charts, making
determinations on which way he believes the price action of a particular asset will go.

Moreover, for the first time I am revealing the specific charts/indicators I personally use
when choosing to open a position.

The three following charts are of ticker SPY, SPDR S&P 500 ETF Trust.

All brokerage trading platforms include the ability to create charts, doing so can be an
overwhelming task, but here I am going to outline the actual time frames and indicators which I
personally use and show you exactly how to use them.

Before I move on let me just say that I WISH I had material like this when I began trading. I have
spent years developing a system that works, and right here and now you are going to reap
rewards that can only come from huge experience and a lot of time.
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These 3 following charts are THE specific and only ones (with the exact indicators/settings I
personally use). Later on we will go over each critical component of these charts so it will be
easy for you to make a determination as to if you should be opening a position or not.

The following chart is a one year daily chart.

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The chart below is an intraday 5 minute chart which I use in an attempt to get the best
possible price once I decide to enter a position.
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This next chart is a 5 year weekly snapshot, this is how I gain a perspective on the
bigger/longer term picture.

The information contained in the three previous charts is complex, so let me breakdown each
segment beginning with the overall chart style.
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The basis for any chart is gauging the price action, and I use whats called Candlestick Charting
as my foundation.

On my one year daily chart again posted below, (the most important chart), each candlestick
represents one day of trading. By looking at several candlesticks over a few trading days you
can gain a lot of information as to how other Traders are thinking about a particular stock.

One year daily chart.

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Chapter 3.

Patterns.

Having an understanding of these candlestick patterns alone without using any other indicators
can be very profitable.

Have a look at these chart segments/patterns below taken from

http://www.iforex.net.in/japanese-candlestick/
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The following patterns are also important taken from

http://www.chartpatterns.com/flagsandpennants.htm
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Below is a typical candlestick pattern in action with reference to the previous patterns. Taken
from http://www.profitsrun.com/featured/gold-candlestick-price-patterns/
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Being that you now have an idea of candlestick charting and some important patterns I am now
going to breakdown the indicators which I use.
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Chapter 4.

The Keys to Becoming a Successful Trader.

On the one year chart a true key indicator is the Williams %R.

The Williams %R is a momentum indicator which determines if an asset is oversold or

overbought. If used in a specific timeframe, the Williams %R can make you a lot of cash.

The standard time frame used on a typical chart with regard to Williams %R is (14). If you notice
on the chart segment above, I use two time frames, the (4) and (7). I use the (4) to gauge the
short term expected price action and the (7) to confirm it. Notice how the (4) reacts faster and
is confirmed by the (7) which follows.
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Lets look at the relationship between the Williams %R as I use it, and the price action of a
stock.

Below is a one year chart of Boeing, ticker BA. Take notice of the relationship between the
Williams %R and the candlestick patterns I outlined. I just highlighted 3, do you see more? Keep
in mind no relationship between indicators and price action is absolute, there will be times
when they move in opposite directions, but there is a longer term direct correlation between
them.

Lets build on our one year chart and use another indicator.
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This next indicator is known as the Ultimate Oscillator, (UO).

(Also keep in mind that you can assign specific colors to your indicators on all professional
trading platforms).

Below is a segment of the (UO).

The Ultimate Oscillator also determines oversold/overbought conditions but reacts just BEFORE
the actual price movement takes place. This is why the (UO) is known as a leading indicator.

Lets look at the (UO) in action.

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With regard to the previous chart and the (UO). I used it to demonstrate how the (UO) helps
pick tops which would have made profit shorting the stock, you can also use it to help pick
bottoms. Again one must look at the overall picture taking into account the price action with
regard to the candlestick patterns, the Williams %R, and the (UO).

Lets look at all three of these indicators together in action.

The above circled areas is what I call the Dream Spots. That is recognizing these three
corresponding signals is incredibly profitable. You need to align candlestick patterns with both
the Williams %R both (4) and (7) time periods with the reversal of the (UO). Can you say CASH!

I want to outline one more indicator which I use also as a leading signal, its called the MACD.
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The Moving Average Convergence Divergence is a very popular indicator but for me I use the
Histogram part of the indicator.

Below is a segment of the MACD.

When Im looking for a possible upcoming change in the price action, a move higher or lower, I
focus on the Histogram (see white circled area below).
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Lets look at the Histogram in action.

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I spend an inordinate amount of time looking at charts, sometimes I find myself studying the
same chart over and over again. The reason I do that is often times what seems obvious when
you see it, just doesnt just pop out at you and say Im here!

Now that we covered several very important indicators and how to use them, lets have
another look at a complete chart. One year/daily.

Lets move on.

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Chapter 5.

Important Indicators.

I am now going to outline for you the indicators at the top of this chart.

We already went over candlestick price action. Now Im going to show you an important
moving average, the 50 day, and its relationship to price action.
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Notice how the price action attempts to follow the 50 day MA (yellow line on the previous
chart). This is important. As the price action moves either above or below the 50 day MA it tries
to move back. The 50 day MA acts like a magnet so to speak to the price action. If you can
correlate the indicators which we went over earlier with a movement in price action on either
side of the 50 day MA, a lot of cash can be made.

Gauging volatility.

As Traders we want to find volatile situations. That is times where there may be dramatic and
rapid movements in the price action. We can gauge this by using two upper indicators.

This first one is called a Keltner Channel.

Notice how the price action attempts to stay within the channel, and when it the price moves
to either side of the channel it makes a run towards the opposite side. This price action
movement is important but should be used in concert with the other indicators I have taught
you to use so far.
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Bollinger Bands.

Like a Keltner channel the price action within Bollinger band(s) tries to remain inside the
cloud. However the bands move apart rapidly when volatility begins and then they move back
together in times of lower volatility.

In my chart I use both the Keltner channel and the Bollinger band(s) together, and combined
with the previously discussed indicators I can best gauge the most probable movement in the
price action. (See next chart segment).
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We are almost there, just two more upper indicators to go.

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The first one is Pivot Points. PP are used by traders to determine a possible reversal in price
action. PP are lagging and the standard time period is 5, I use 3. (See chart segment below).

Pivot Points are very easy to interpret, a red down arrow suggests that a movement lower in
price is likely. An up green arrow suggests a move higher in price is likely.
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The last indicator I want to talk about is also a lagging indicator called PSAR. Parabolic SAR
(Stop and Reverse). See the chart below which was taken from Investopedia.com

With regard to the PSAR I use the standard settings/time period.

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Now with your new knowledge have another look at my chart. Does it make sense to you
now? Can you imagine the profits you can now reap with this information?

One year daily chart.

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To super tune your skills and to get the absolute best price, you need to look at an intraday 5
minute chart using some of the tools/indicators we already discussed and you are now familiar
with.

Here is a copy of the chart and indicators I use to accomplish this.

Using this intraday 5 minute chart is easy.

Once you determine that its the right time to open a position using your one year daily chart,
you flip to the intraday chart. Now you sit and wait for the right time to execute the trade.

It is really that simple.

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Lastly, using the skills you now possess it is helpful to look at a longer time frame chart in order
to gain a perspective on the bigger picture.

Five year weekly chart.

In your hands right now you possess all the knowledge you will ever need to gauge the most
likely outcome with regard to the price action of any stock or ETF.

Allow me to me the first to congratulate you, because with this new knowledge you can
change your life.

Happy Trading!

Gregory Mannarino

TradersChoice.net
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About me: I started my financial career working for the securities and trading arm of
the now defunct Bear Stearns before the dot-com bubble.
I am an active trader of the capital markets. I have published several books pertaining
to finance, global economics, and equity trading.

I even published a book about casino blackjack strategies a long time ago.
I hold a medical degree and practice medicine.
I served in the United States Naval Reserve Medical Service Corps. Having attained the
rank of Lieutenant.
I have been (and continue to be) interviewed by some of the best in the business (Greg
Hunter USAWatchdog) (Alex Jones INFOWARS) (The Pete Santilli Show) (FutureMoney
Trends) (Caravan To Midnight With John B Wells) (SGT Report)and many others.
I have been published on virtually every financial site on the web.
Currently I host a business day MarketReport on YouTube and have many thousands
of loyal subscribers worldwide.
My newest project is called TradeGame, a FREE series of instructional videos about how
to trade options.

I am a known and trusted authority with regard to the capital markets, equity trading, and
finance.

For my most recent up to date 100% free stock picks visit my website, TradersChoice.net