A price chart displays how an instrument’s price changes over time. Start by identifying what is being measured and over which period.
The idea
The horizontal axis generally represents time and the vertical axis represents price. A line chart connects selected prices, often closing prices. Bar and candlestick charts show more detail for each period. Check the instrument, its price scale, timeframe and whether the chart shows bid, ask or another price. The display describes past data, not the next move.
Apply the idea
Imagine a chart of a share with dates along the bottom and dollars on the side. A point at $100 on Monday and $104 on Friday shows that the selected price rose over that interval. It does not show every movement between those points. Changing the chart type can reveal more detail.
Key takeaway
Read the instrument, axes, price type and time period before interpreting the movement. A chart is a record of prices, not a forecast.
