Introduction on Stock Trend Chart Basis

"It is simple to complicate things but it is complex to make things simple" - Nameless Hero

The charts on this site are generated by a proprietary trend model invented by Raymond Tsang the developer of this site aka Nameless Hero.

I am trying to simplify it here so first I will walk you through a list of chart features and then I will explain how to apply them.

Here is a list of chart features:

A - The stock name with symbol enclosed by parenthesis.

B - The time in eastern region the chart was generated; in this example the chart below was generated after market close. 

C - Trend/Risk/Sentiment level.  Generally speaking the shorter the bar the less risk of going long.  The decreasing of the trend/risk/sentiment level translates to bearish sentiments, on the other hand increasing of trend/risk/sentiment level translates to bullish sentiments.

D - A green background projects a higher price may occur in the next couple of days.

E - A red background projects a lower price may occur in the next couple of days.

F - Period of the chart.  This can be daily, weekly or monthly depending on chart type.

G, H, I - A green bar suggests the current trend is upward.  A red bar suggests the current trend is downward.  A black bar suggests the current upward trend is about to end.  G the bottom bar represents long term trends; H, the middle bar represents middle term trends and I, the top bar represents short term trends.

J - The closing price or current price on that particular date.

Consistency That Matters!

To understand how the charts work we need to know that the price is not important.  We are looking for the consistency of the color bars only.  On the same day if all bars (I, H, G) share the same color then it creates a more accurate trend signal.  A trend could be as short as one day or longer than 10 days.  A mixed color of bars represents consolidation or flat in technical terms.  Most of the time the bar colors are reliable to project the next trend in the next period which means the direction of trend is quite predictable.

Trend/Risk/Sentiment Level

For short term traders the length of the highest bar is most important. Next we need to look at the overall risk level (the length of the whole bar).  Of course we can always join the trend anytime but the later we jump on the wagon the more risk it incurs.  The risk level also gives us some information about a newly formed trend (first green bar appears after a long consecutive red bars or no bar) or a mature rally (many green bars have already appeared).  The higher the risk level the more risk to take a long position and vice versa for shorts.

Use the Short Term Bar to Take Positions

Let's talk about the short term bar as it is a handy indicator to take position in the middle of an upward trend at a low risk manner; the short term bar usually cycles pretty often in terms from 6 to more than 10 days.  When the short term bar is at its lowest (could be as thin as a sheet) and the closing price is barely higher than the previous day's closing price or at the same floor e.g. Nov 2nd, $38.44 $38.33 and $38.64 are at the same floor of $38 (ignore the decimal places).  Usually it is pretty safe to take positions if the above criterias are met.  The stop loss should be set within 3% and should be no more than 3%.  In most cases in the next day you will see a higher close if the next bar is longer and all terms are in green.

What's the Magic Behind?

Believe it or not there is no magic behind.  The model was created based on the boom and bust theory, just like Tai Chi.  It measures the momentum of the trade people do which reflects on the price movements and volume force.  After the noise is filtered the signals are revealed and it is amazing that those signals are consistent enough to provide a guide to follow the trend.  The model has been sharpened years over years to be able to provide signals at this level and is presented in such a way that most people are able to understand compared to some other technical indicators.  The model is hardly fooled by manipulations because it measures the underneath movements instead of just pure price or volume.

Weekly and Monthly Charts

These charts work the same way as daily charts.  The weekly and monthly charts just provide a bigger picture that daily charts can't give.  Basically it works like a zoom out and gives us a better picture of what's happening.  We offer weekly charts to our registered users and monthly charts are only available to our subscribers.