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CandleStick Charts
The Basics
Candlestick Shapes
Pattern Recognition
Trend Recognition
Support & Resistance

ChartSmarts Charts
What is ChartSmarts?
Using ChartSmarts
ChartSmarts Legend
ChartSmarts FAQ

General Information
Glossary of Terms
Other Sources

Using ChartSmarts

ChartSmarts is delivered before every business day to the email you provide on the order form.

ChartSmarts may seem a bit confusing at first. When you first receive ChartSmarts, it may be like turning on the television in the middle of a program, and then trying to play "catch up" until all of the characters are clear. We try to make that time as short as possible. Hopefully, this section will help.

The Layout

The first thing you should view is the  ChartSmarts newsletter is the legend. You can find it on the navigation menu to the left.

Please read the legend. There is important information on how to use ChartSmarts, as well as a "rules of the road" section.

No doubt, when you receive your first issue, you will note that there are various commentaries on the charts themselves, as well as above and below them. The comments on the charts are those of our Chartist, while the comments above and below the charts are those of Mark Young, our Technical Analyst.

Sample Chart

Above is a chart from an actual issue of ChartSmarts. You will note that all comments on the charts are preceded by the date they were written, and that the most recent comments are written in red. (Also note that the issue date is on every single chart in the top right corner.)

Near the end of the newsletter, we list all of our current positions, as well as specific stocks on our "watch list." Stocks on our watch list are to be set in motion for the following market open.

We also update any changes from the previous issue, including new positions, stop changes, or targets reached.


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Acting upon ChartSmarts Recommendations

ChartSmarts provides you with the stock picks, targets, stops, weightings, overall market analysis, sector analysis, market timing, sector and ETF plays.

Take the example below. On a chart, this meant that after the market close on 6/28/02, we recommended that subscribers buy this stock after it hit $6.01, and place a stop loss order at $5.64. If during the day, the stock moved $.38 higher, then you should raise your stop to 6.01 (the breakeven point) and sell the stock at the target price of $6.79 for a 13.31% profit.

You can also use ChartSmarts for your own personal trading.

You can use ChartSmarts to help you manage risk. Use the Index Charts at the beginning of each issue as a background for reducing overall portfolio risk. For example, if the Dow Jones Industrial Average is beneath a major neckline, and has not met any important downside targets, minimal long positions should be held, and perhaps short positions should be considered.

ChartSmarts is designed to help traders manage their trading account like a professional model portfolio in order to reduce risk.

ChartSmarts is run as if it were the instruction manual for a $50,000 trading account. As such, we normally do not recommend putting more than 10% of it in any one trade for purposes of diversification.

In volatile markets we regularly suggest half positions to minimize exposure, which means we would not recommend allocating more than 5% of a traders total portfolio to a particular trade.

Use the ETF's for trading the major indices.

For instance, the DIAmonds (DIA) correspond to the DJIA, the Q's (QQQ) correspond to the Nasdaq 100 (NDX), and the SPYders (SPY) correspond to the S&P 500. If, for instance, the Dow had just recently closed below major support at 8900, you would short the DIA, and look to partially cover as the Dow approached various support levels.

If you have time and expertise to day trade, you can use ChartSmarts' support and resistance levels to improve returns.

If you can actively monitor a position you need not close a position at our targets, since you can trail a stop (i.e. move your stop loss order closer to the current market as a position gets profitable) to protect profits. In traders parlance, this is called "letting your profits run."


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Extra Tips on Using ChartSmarts

Tip #1
When multiple indices and major stocks are all hitting important target levels at one time, look for a turn and a move in the opposite direction

Tip #2
Often our chartist will chart the CBOE Volatility Index (VIX). This index measures moves in an inverse relationship to the market, and often, when it is at extremes, is a good indication of market value (VIX at high levels) or market risk (VIX at low levels). This can be very useful when determining the level market exposure that one is comfortable with.

Tip #3
We prefer to Buy strength and Sell weakness, if we can. This usually allows us to quickly place a stop very close to entry if not at break even. Most times, the benefit of getting right quickly and moving stops in close far exceeds the benefit of getting in at a slightly better price (in a stock that may not be ready to move in our direction).

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