Recently, someone asked me how to understand the lines on trading charts.

Actually, they are just a few indicators that keep appearing repeatedly.
Today, I will break down the most commonly used ones so you can understand them instantly.

Let's start with the moving average line, called MA.
The principle of this thing is super simple: add up the prices over a certain period and divide by the number of days, which gives the average price.
For example, if your scores on the last five exams are 80, 85, 90, 95, and 100, the average score is 90.
The red line on the chart represents MA, which helps you see the overall trend of the price and prevents short-term fluctuations from confusing you.

Next is EMA, the Exponential Moving Average.
This one is a bit smarter than MA because it emphasizes recent price changes more.
Using the exam example again, if you’ve recently performed exceptionally well, EMA will reflect your improvement trend more quickly.
On the chart, the blue line is usually EMA, and you'll notice it reacts more sensitively than the MA line, showing higher responsiveness to price changes.

Bollinger Bands consist of three lines: the middle is MA, and the upper and lower are called the upper band and lower band.
Imagine a rubber band: when the price stays within the normal range inside the bands, it’s like the rubber band is relaxed; if it pulls too tight, it bounces back.
The green lines are the upper and lower bands, and the red line is the middle average line.
Prices usually don’t stray too far outside this range.

Volume is more straightforward.
It shows how many people are buying and selling.
The taller the bar, the more active the trading.
For example, if 100 kids rush into a candy store today, the volume is high; if only 10 come, the volume is low.
The bar chart at the bottom represents trading volume.

Actually, mastering MA and EMA, along with volume, allows you to read most charts.
Other indicators like MACD, RSI, and KDJ are derived from these basics.
If you look at trading charts often, you’ll naturally understand these concepts after just a few times.