What is a chart?

The diary of agreements

One candle taken apart: where its stretch of time opened and closed, and the highest and lowest prices in between. Beside it, or below it on a phone, eight of them in a row, with how many shares changed hands drawn underneath.

A chart is every agreement drawn in time. Older on the left, newer on the right; higher up means a higher price. Put a dot for every handshake and you have a diary of what everyone agreed to, one after another.

A busy share sees thousands of handshakes a minute, far too many dots to read. So a chart squeezes each stretch of time into one shape, a candle: a box from where the stretch opened to where it closed, with a thin line poking out above and below to the highest and lowest prices touched along the way. If it closed higher than it opened the box wears one colour; lower, another.

How long each candle covers is the timeframe: a minute, an hour, a day, a week. The same share drawn in day candles and in minute candles tells one story at two distances, the way a map can show a country or a street.

Under the candles there is often a row of bars: the volume, how many shares changed hands in each stretch. A big move on a big crowd says something different from the same move on a handful.

A chart shows only the past. It is a diary, not a map of tomorrow; reading one is reading what people did, not what they will do next.

Said with a food truck

Say you keep a notebook of every sale of a food-truck slip. After a few months it is pages of numbers, and you cannot see anything in them.

So you change how you write it. One line per week: the first sale of the week, the highest, the lowest, the last. Then you draw each week as a little box from first to last, with a line from highest to lowest through it. Twenty weeks become twenty little boxes in a row, and in one glance you can see the critic’s rave, the dead engine and the slow spring after.

That is step four. The next chapter is the moment you stop watching and want in: how buying actually works.

Nothing here is advice. The whole ladder is on one page; the app behind it is free to start - the door opens to any address. Education only. Pumpstradamus is a paper trading app: no real money is traded, and we are not a broker or an adviser.