Prices are plotted from left to right across the x-axis. On the chart, the y-axis (vertical axis) represents the price scale and the x-axis (horizontal axis) represents the time scale. With a chart, it is easy to identify and analyze a currency pair’s movements, patterns, and tendencies. 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.Ĭharts are user-friendly since it’s pretty easy to understand how price movements are presented over time since it’s sooooo visual. 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).Īny financial asset with price data over a period of time can be used to form a chart for analysis. In order to study how the price of a currency pair moves, you need some sort of way to look at its historical and current price behavior.Ī chart, or more specifically, a price chart, happens to be the first tool that every trader using technical analysis needs to learn.Ī chart is simply a visual representation of a currency pair’s price over a set period of time.
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