A chart, or a price chart, is the first tool that every trader using technical analysis needs to learn.
A chart is simply a visual representation of a currency pair’s price over a set period of time.
It visualizes the trading activity that takes place during a single trading period (whether it’s 10 minutes, 4 hours, one day, or one week).
Any financial asset with price data over time can form a chart for analysis.
Price changes are a series of mostly random events, so our job as traders is to manage risk and assess probability and that’s where charting can help.
Charts are user-friendly since it’s pretty easy to understand how price movements are presented over time since it’s visual.
Understanding Patterns
With a chart, it is easy to identify and analyze a currency pair’s movements, patterns, and tendencies.
On the chart, the y-axis (vertical axis) represents the price scale and the x-axis (horizontal axis) represents the time scale.
Prices are plotted from left to right across the x-axis.
The most recent price is plotted furthest to the right.
Back in the day, charts were drawn by HAND!
