3. One company and its price

One company and its price

What a company is, and what its price has done.

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  • 4 sections
  • 15 lessons
  • 1 h 14 min
About this chapter

This chapter answers one question for any ticker, "what is this company, and what has its price done?", with the pages that show it and the words traders use for what you see.

What you will be able to do

  • Open a company's overview page and read the quote, the range bars and the long chart in under a minute.
  • Keep a small board of prices open while you work.
  • Read a candle chart: what a candle is, what volume is, how to change the time range and the size of each bar.
  • Turn on the common indicators (moving averages, RSI, MACD, Bollinger Bands, VWAP) and know what each one is trying to say.
  • Pull up a price history table and a returns table, and tell an interval return from a total return.
  • Ask whether a stock has a "calendar" (seasonality) and know why that answer is weak evidence.
  • Watch the tape (every trade as it prints) and the best bid and ask (the NBBO), and read a spread in basis points.
  • Know what an ETF is and where its official documents live.
  • Backtest a simple rule and explain, in plain words, why a backtest lies.
  • See which customers and suppliers of the companies you follow report earnings soon.

How the chapter is built

Four short sections, in the order you would use them on a new ticker:

  1. The company at a glance: the overview page, a board of quotes, what a fund page is, and which neighbours report soon.
  2. Charts: candles and volume, one session up close, indicators and price levels, charting anything next to anything.
  3. History and returns: the price table, the returns table, seasonality, and testing a rule on the past.
  4. The tape: every trade as it prints, and the best bid and ask over time.
Diagram: What is this company? leads to DES; DES leads to QQ; DES leads to ETF; DES leads to RIPL; DES leads to What has the price done?; What has the price done? leads to GP; GP leads to GIP; GP leads to Indicators; Indicators leads to G; What has the price done? leads to HP; HP leads to RETURN; RETURN leads to SEAS; SEAS leads to BT; GIP leads to TAS; TAS leads to QR.
Wide diagram: scroll sideways to see all of it.

Five words to know before you start

ticker
the short code for a listed company or fund, like AAPL for Apple
quote
the current price picture: last trade, best bid, best ask, change on the day
bid / ask
the highest price a buyer will pay right now / the lowest price a seller will accept right now
candle
one bar on a chart that shows the open, high, low and close of one period
return
how much the price changed, as a percentage of where it started
  1. Section 14 lessons · 18 minThe company at a glanceThe first minute on any ticker: front page, quotes and peers.
    1. 1.1The overview page (DES)5 min
    2. 1.2A board of quotes (QQ)4 min
    3. 1.3A fund's official documents (ETF)4 min
    4. 1.4Earnings ripple (RIPL)4 min
  2. Section 25 lessons · 24 minChartsPrice charts, one session up close, indicators and levels.
    1. 2.1Reading a price chart (GP)4 min
    2. 2.2The intraday chart (GIP)4 min
    3. 2.3Moving averages, RSI and MACD (chart indicators)5 min
    4. 2.4VWAP, bands, ATR and price levels (chart tools)5 min
    5. 2.5Chart anything together (G)5 min
  3. Section 34 lessons · 18 minHistory and returnsPrice and return tables, seasonality, and testing rules on history.
    1. 3.1The price history table (HP)4 min
    2. 3.2The returns table (RETURN)4 min
    3. 3.3Seasonality (SEAS)4 min
    4. 3.4Backtesting a rule (BT, BTST)5 min
  4. Section 42 lessons · 11 minThe tapeEvery trade and every quote change, as they print.
    1. 4.1The trade tape (TAS)5 min
    2. 4.2The best bid and ask over time (QR)5 min

Educational material about reading market data, not investment advice.