Case: mark up a chart and write the plan

Marking up a chart ends in a plan, and a plan has two rules.

1. No forecasts. First describe what the chart did: the trend, the range, the levels. Then write decisions as conditions: "if this happens, then I do that". Anyone can check a condition against the chart later; nobody can check "it will go up".
2. Say when you stay out, not only when you get in. A week without a trade costs nothing. A forced trade costs the spread, the fees and often a loss.

For Northwind Foods, which reports quarterly results on Tuesday 2026-09-22, "it went up all summer, so it will go up more" breaks rule 1. "If a day closes above 36.00 after the report, then I consider buying; until then I stay out" follows both.

The rest of this case builds such a plan step by step: shape, levels, where the price is now, what to avoid, and the stop and size.

Start with the shape, using the same two-week blocks as in Trend and range: blocks show the shape, daily candles the details.

Northwind Foods, 80 days up to Friday 2026-09-18:

• Blocks 1–4 (June to late July): highs 31.43 → 35.95, lows 29.88 → 34.16, closes from about 30.17 to 35.66. Higher highs and higher lows: an uptrend.
• Blocks 5–8 (late July to mid-September): highs stall at 35.80–36.00 (one poke to 36.25), lows at 34.50–34.55. A sideways range.

So "it went up all summer" is only half true: the climb stopped in late July, and the last two months went sideways.

Both labels describe the past. The uptrend tells you about June and July, not about next week. That's why the plan starts from the most recent shape, the range, and treats an exit from it as a condition, not an expectation.

Next, mark support and resistance from the data, before thinking about any position (as in Support, resistance and breakouts). On Northwind Foods since late July:

• Resistance: the highs stopped at 35.80, 35.81, 35.95 and 36.00 (2026-08-05). Mark the zone 35.80–36.00.
• Support: the lows stopped at 34.50 (2026-08-17) and 34.55 (2026-09-02). Mark the zone 34.50–34.55.

Zones, because one exact line invites arguing over every cent, and the data only supports "around here".

Then measure the box: 36.00 − 34.50 = 1.50 dollars. Compare it with the usual daily move. Over the last 20 days Northwind Foods travelled 0.31 a day from low to high, so the box is about five ordinary days wide. For this calm share that's room to plan with; a share that swings more could cross the same box in one day.

A level that has already produced a false breakout deserves extra caution in the plan.

On 2026-08-24 Northwind Foods reached a high of 36.25, above the 35.80–36.00 resistance zone, and closed at 35.65, back inside the box. That is a false breakout as defined in Support, resistance and breakouts: it poked out and closed back in. For the next four weeks the closes stayed between 34.90 and 35.79.

Anyone with a buy stop just above 36.00 was filled that day and caught. That's why the plan's entry condition is a daily close above 36.00, not a touch during the day. It skips pokes like this one, at the price of entering later and higher, and a close above can still fail.

One failed poke doesn't mean the next one will fail too. It only means the plan shouldn't treat any move above 36.00 as settled until the day closes.

After the shape and the levels, place the last close in the box. Northwind Foods closed at 35.74 on Friday 2026-09-18, near the top: 36.00 − 35.74 = 0.26 dollars below the top of the resistance zone.

A distance means little until you compare it with how far the price usually moves. The average daily range over the last 20 days was 0.31 (high minus low, averaged). So 0.26 ÷ 0.31 ≈ 0.84: less than one ordinary day separates the price from the top of the box.

That tells you what not to do. Buying here in the hope of a breakout puts the entry right under resistance, where one ordinary day can go either way, and the chart doesn't say which. It's the middle-to-upper part of a range, the place a plan usually says "stay out" until the condition, a close above 36.00, is met.

A plan also names the days it avoids, and scheduled news is the clearest case. Northwind Foods reports quarterly results on Tuesday 2026-09-22.

On report days even a calm share can open far from the previous close: a gap. A stop is an order that waits for the price to reach it; if the price jumps straight past it overnight, the order fills at the first available price, beyond the stop. That's the gap-through-the-stop trap from The stop: where it goes and why: the real loss is bigger than the planned one.

Example: in at 36.10 with a stop at 35.30, a report-day open at 34.70 would fill the stop around 34.70, not 35.30. The planned 0.80 a share becomes 1.40.

The report could push the price up or down; the plan doesn't guess which. It simply stays out until the report is out and the price has settled.

A plan that only lists entries pushes you into trades. A good one lists the conditions under which you do nothing, and each must be a reason you can check.

For Northwind Foods this week, three checkable reasons say stay out:

• The report on 2026-09-22 can gap the price past any stop.
• No signal yet: the price sits inside the 34.50–36.00 range, with no daily close above 36.00.
• The level has already fooled people once: the poke to 36.25 on 2026-08-24 closed back at 35.65.

Two tempting "reasons" don't count. A past uptrend proves nothing about next week. A candle's colour only compares its own open and close.

Staying out feels boring, and boredom is a real risk: trades taken just to do something are among the easiest to regret. A week without a trade costs nothing; a forced one costs the spread, fees and often a loss.

The last part of the plan turns the levels into numbers you risk. The chart decides where the stop goes; your risk limit decides the size.

Stop: put it where the idea is proven wrong. An entry at about 36.10 after a close above 36.00 bets that the price has left the range. If it falls back inside, the idea is wrong, so the stop sits at 35.30, below the last two weeks' low of 35.37: 0.80 a share.

Size, with risk per trade from Risk per trade: a small share of the account (1% of 10,000 = 100 dollars) and the formula from Position size from risk and stop: (100 − 3) ÷ 0.80 = 121.25, so 121 shares. A hit stop costs 121 × 0.80 + 3 = 99.80 dollars, unless a gap jumps past it.

How it fits together: describe the shape, mark zones, place the price in ordinary days, write an "if…, then…" entry, name the stay-out days, then set stop and size. Module 6, Which tools are worth my time?, starts with Moving averages: a first tool laid over this chart.