Quick Start

A Brief Introduction to ChartOverlay

Version 2.0.9

Please resist the temptation to close this document and just jump in. ChartOverlay is an unusual program and a few minutes spent reading this file may save you a lot of time. Don't feel you need to remember everything here on the first pass. Just get an overview and remember enough to have some idea what this introduction contains that might be worth reviewing later.

To see this document again (or to see any of the documents to which it refers), you can use the Start Menu or you can just open the file.

Product Overview

ChartOverlay is a drawing program for Technical Analysts. It allows you to use any of several advanced charting techniques while continuing to use your favorite charting program. ChartOverlay itself is not a charting program. To use it, you need to have a separate charting program, or at least a chart that you can view with another Windows program.

The main window in ChartOverlay is transparent (or, if you prefer, translucent). To use ChartOverlay, you place its window on top of another application that is displaying a chart. You can then view the underlying chart and draw on the overlay based on patterns you see in the chart.

These characteristics make ChartOverlay quite different from other programs you may have used. Reading through this brief document, and referring back to it as necessary, will help you understand the principles behind the program and how to take advantage of its features to assist you in making better trading decisions.

When you first start ChartOverlay, you will see a toolbar along the top. Below the toolbar you should see a transparent window through which you can see whatever is in the background (if you have a system older than Windows 2000, see the note at the end of this document).

The toolbar contains several drawing tools (buttons) on the left. In the middle there are buttons to Refresh, Edit, Erase or choose Logarithmic scaling and on the right are buttons for Options, Help and Program Information. Hold the cursor over any of the buttons on the toolbar and you will see a hint telling you what the button does.

Some of the toolbar buttons will be temporarily disabled; this is normal (for example, the Parallel button is disabled when nothing is selected and the Erase buttons are disabled when there's nothing to erase).

Click on any enabled drawing tool button to activate the corresponding tool. The button will change appearance when it has been pressed so you can tell which tool is active.

After you press a drawing tool button, a dialog box will appear. Most items in the dialog have tips associated with them; just point your cursor at any item you'd like to know more about and wait a second or two. Each tool dialog also has a brief description of how to use the tool (look at the bottom or on the right).

Most of the dialogs have several features (described in detail in the Help file). This may seem intimidating at first glance, but many of these features only need to be set occasionally to suit your individual preferences. Often there are many different ways to perform a task and the various options allow you to adjust the program to meet your needs. To reduce clutter each of the drawing tool dialogs has a "Fewer Options" button; if you click that, a smaller dialog will replace the full dialog ("More Options" will bring back the full dialog).

Once you click OK to close the dialog, you will be ready to draw. Each tool requires a certain number of points to define an object (see the list below). This will usually be one, two or three points but can be more. These are the Defining Points for the item. When two points are required (eg, to define a Trendline or a Fibonacci Retracement), you specify the two points by drawing a line from one to the other (this lets you adjust the second point a bit before releasing the mouse button). For one or three points (or more), simply click where you want the points.

ChartOverlay then takes over and applies the rules for drawing the object you selected along with any options you have specified. Any necessary math is done by the program.

Don't worry if you don't get your points exactly where you want them. Once you've drawn an object, it's very easy to modify it by moving any of the defining points (which are highlighted by small circles). You can also move the entire object. To move a point hold the Ctrl key while clicking on the point and then drag the point where you want it. To move an object, hold the Ctrl key while clicking on one of its lines (but not on a defining point) and then drag the line to where you want it. When working with real-time charts, you can move all objects together (Ctrl and Alt keys together while dragging, or just use the Arrow keys) or you can expand (+ key) or shrink (- key) the objects you have drawn to adjust to changes in the scale of the chart.

Drawing Tools

ChartOverlay has several built-in drawing tools from which you can select the ones you'd like to use. See below for brief usage descriptions.

Trendlines (two points) with
- optional Speed Resistance Lines
- optional Gann Fans

Parallel Lines (one point) with
- optional Action/Reaction Lines

Fibonacci Retracements (two points) with
- whatever levels you specify
- optional Fans
- optional Arcs
- optional Time Extensions

Fibonacci Price Extensions
- based on a Retracement (one point) or
- without drawing a Retracement first (three points)

Andrews Median Lines (Pitchforks) (three points) with
- whatever warning levels you specify
- optional reaction lines
- optional trigger lines
- optional pivot zones

Time Cycles (two points) with
- fixed or Fibonacci intervals

Text (two points)

You can draw as many as you want of each object. If you normally draw several items, you may want to consider automatic color selection to help you tell them apart (see the Options dialog).

Other Features

In addition to the toolbar, ChartOverlay has a menu that you access by right-clicking anywhere below the toolbar. The menu contains all features in the toolbar and a few others as well.

Once you have finished drawing, you can save your work as an image that contains both the original chart and the lines you have drawn. You can also save anything you have drawn in a file that can be read later by ChartOverlay; this lets you work on several different charts without having to redo your work each time. These features appear on the menu.

It is very important to realize that neither ChartOverlay nor the charting program is aware of the other. They are completely independent. The only connection between the two programs is your mind. ChartOverlay cannot see your data (that is, it knows nothing about any of the values on your chart). The advantage of this approach is that ChartOverlay works with any other program. You can use it with data services, web sites or PDF files. You can even use it to study online newsletters (for example to draw additional lines to question or confirm or even extend the author's analysis).

ChartOverlay offers many ways to adapt its behavior to your style of working. Each item you draw has several properties you can control (such as individual color and line thickness).

There are three options that appear in each tool dialog. The first allows you to specify whether drawing tools should remain selected or whether their buttons should pop up after they have been used. The second controls whether you see the tool dialog each time you click on a tool button. The third determines whether the choices you make when using the dialog become the defaults the next time you run the program. You can choose different settings for each tool.

Finally, there are also several properties that apply regardless of which object you're working with. These include such things as automatic color selection, dynamic or static background and how much toolbar information to display. To change general properties press the Options button on the toolbar or choose Options from the menu.

You may have noticed several references to the Ctrl key. There are several ways in which the keyboard can influence ChartOverlay. As a general rule, the Ctrl key lets you operate on an existing item (instead of simply drawing a new item); it also lets you temporarily override certain settings (such as whether to open a dialog when selecting a tool). The Shift key lets you keep movement horizontal or vertical, while the Alt key can be used to mean "All". See the document Using the Keyboard in ChartOverlay for more details.

We welcome feedback on the ChartOverlay. If you like the program or the documentation, let us know. If you don't like something, we'd like to know that also. We'd also like to hear your suggestions. Comments from users help us improve the product. If you do like the program, please feel free to spread the word; more users mean more and better features.

Brief Notes on Individual Tools


After selecting the Trendline tool, simply draw a line wherever you want it. Depending on which features you selected, the line may be automatically extended and additional lines may be drawn.

Parallel Lines

Select the object for which you want a parallel line. If it's an object for which a parallel can be drawn (Trendline, Retracement or Pitchfork), the Parallel tool button will be enabled. Click the button and then click on a point through which you want the parallel to pass. If you requested them, Action/Reaction Lines will be drawn.

Fibonacci Retracements

After selecting the Retracement tool, draw a line from the beginning of a price move to the end (order is important; start with the price that is earlier in time). There are many options, too many to cover in an introduction, but they includes Arcs, Fans and Time Extensions.

Fibonacci Price Extensions

There are two Extension modes. By default, an Extension requires a prior Retracement. Select a Retracement you drew earlier; this will enable the Extension button. Click the Extension button and then click on the point from which you want the Extension to begin.

Some users do not want to draw a Retracement first. In this case, the Extension button is always enabled. After selecting the Extension tool, click on three points; the first two define the move to be extended and the third defines the point from which you want the Extension to begin. The check box that selects this mode is located on the the Fibonacci tab in the Options dialog.

In both cases, there are several options from which you can choose.

Andrews Median Lines (Pitchforks)

Andrews Median Lines (popularly known as Pitchforks) are drawn by clicking on three points that represent an alternating sequence of significant highs and lows. In addition to drawing the basic Median Lines, you can choose whether or not to draw several additional lines (warning, reaction, trigger or pivot; to draw Action/Reaction Lines, see the Parallel tool).

Time Cycles

You can draw either Fixed or Fibonacci Time Cycles. In either case, you must tell ChartOverlay the width of the bars on your chart (remember that ChartOverlay can't "see" your data). To do this, you must first specify a Calibration Length in the Time Cycles dialog (call this length N) and then draw a horizontal line that starts at the center (or edge) of any price bar (bar zero) and ends at the center (or same edge) N bars to the right. From this ChartOverlay computes an average bar width (the larger N is, the more accurate the cycles will be).


After selecting the Text tool, enter your text in the dialog and format it. Then draw a line from the upper left corner to the lower right corner of the rectangle in which you want the text to appear (if necessary, the text will extend beyond the bottom).

Special Considerations for Windows 95, Windows 98 and Windows NT

ChartOverlay uses a feature called layered windows that was introduced in Windows 2000. If you have an older system that does not support this feature, you can still use ChartOverlay to draw on your charts; but it will not show changes in the background chart in real-time. Instead, it will be necessary for you to Refresh the overlay from time to time. For End-of-Day data this won't be too much of a problem, but it may make real-time usage more difficult than it would be on a newer system. See Static Mode in the Help file for more information.