As a new investor, you've probably had people tell you over and over that the only rule you need to remember is to always "buy low and sell high." This sounds simple enough, and assuming that you have a basic idea of how making a profit works, it's pretty easy to grasp, even for the brand new trader. The only problem is that it can be hard to know if a price has sun low enough or soared high enough, as the market is moving up and down all the time. What may seem like a good time to buy might be only the halfway point of a stock's journey to lower prices. If you're going to trade at the right time, you've got to learn how to decode the market's message through chart patterns.

One of the best things about chart patterns in today's modern market is that you no longer have to worry about tracking or drawing them by hand. There was a time when humans were responsible for finding out the range of prices that a stock enjoyed the day before, and plotting them on a graph for visual analysis, but those days are over.

When you first start to investigate chart patterns, you might be a little overwhelmed, because there are literally hundreds of different patterns, gaps, and trends that you can look for at any given point in time. But like anything, it's important to start with the basics. One of the first patterns that new investors work on identifying is the head and shoulders pattern. This is a reversal often observed while the market is in an uptrend. Although the pattern tends to form while price is increasing, it ultimately signals that a downturn is on the horizon.

Another one of the most basic chart patterns to learn to identify is the candlestick. This pattern is constructed in such a way that traders can begin to see a relationship between opening and closing prices. The body of the candlestick shape is traditionally solid or hollow, with thin lines, known as shadows, tails or wicks, developing from the top or bottom of the body. These lines show the range of prices traded during that specific period, and can be used to detect a discrepancy between the actual value of the stock, and the public's perception of value as expressed through price. Look for explanations of charts online, and practice looking for them in past market activity.