CHAPTER 2
Start with Charts

ANSWER 2.1   CI Daily Candlestick Chart

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  1. This is a candlestick chart
  2. Daily time increments describe the X axis, and price increments the Y axis.
  3. The open, high, low, and close are labeled.
  4. Body, or real body, which is the box section of the candlestick, lower shadow from the bottom of the box to the low, and upper shadow from the top of the box to the high. The latter is missing here, because the top of the box, the open, equals the high.
  5. Stars, as the open and close of each candlestick are close together.
  6. For stars, the point is that the open and close are near each other, so it doesn't matter if they are filled in or empty.

ANSWER 2.2   CI US 30M OHLC Bar Chart

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  1. This is an open high low close, OHLC, bar chart
  2. It is not a natural time increment chart, which includes monthly, weekly and daily charts. It is an intraday chart.
  3. Open, high, low, and close as labeled.
  4. Trendline is drawn in, as labeled. Note that trendlines don't have to be perfect. This trendline touches price lows in three places. It doesn't matter that it was penetrated once.

ANSWER 2.3   BCRX 0.10*3

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  1. The Xs represent up moves, and the Os down moves.
  2. Since the chart is 0.10*3, each box represents a move of at least 0.10.
  3. The “*3” means three boxes are needed.
  4. See columns circled. Each of these columns has only three boxes. Those circled with Os represent minimum down columns, and those with Xs minimum up columns.
  5. Support and/or resistance lines are shown by the red dotted lines.
  6. Arrows show support and resistance points for the selected line.

ANSWER 2.4   EURUSD OHLC Bar Chart with Line on Close Superimposed

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Line on close is drawn in red above. Note how the lines connect to the point at which the closing tick intersects the bar.

ANSWER 2.5   Nomenclature

  1. GC denotes CME gold futures. X is November, and 16 is 2016. So these are November 2016 gold futures.
  2. CLF20 stands for January 2020 WTI, CME crude oil.

ANSWER 2.6   Equities versus Futures

  1. Futures expire.
  2. A rollover gap takes place if there is a jump or drop in price when the prompt contract expires and the next contract becomes prompt.
  3. No, equities don't expire.
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