What Is a Chart?
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A chart is a visual representation of market data over time. In trading, charts allow us to examine price movement, structure, volatility, and other information in a compact format.
What Can a Chart Show?
Depending on the chart type, we can see price, time, volume, and derived information. The most common price charts use bars or candlesticks to summarize trading activity during defined periods.
A chart does not predict the future. It is a representation of historical and current market data that we can use as part of analysis and decision-making.
Chart Elements
- Horizontal axis: time
- Vertical axis: price
- Price bars or candles: price behavior during each period
- Volume: trading activity when available
Key Terms
Chart, price, time, candle, bar, volume, market data.
Knowledge Check
- What is a chart?
- What do the horizontal and vertical axes usually represent?
- Why should we not treat a chart as a prediction machine?