What is a price chart?

A price chart is a sequence of prices plotted over a specific timeframe. In statistical terms, charts are referred to as time series plots. On the chart, the y-axis (vertical axis) represents the price scale and the x-axis (horizontal axis) represents the time scale.

What is a line chart?

A line chart does not offer much detail as it includes only the closing price of each period. However, line charts are cleaner than other chart types. Hence, they are great for: 2. Bar Charts To build a bar chart, we need the following pieces of price data from each time period. With these information, we can build a price bar for each time period.

Do price charts have a time base?

Study of price charts began before technology was able to send market (tick) data instantaneously. Building charts with continuous price data was not possible. Hence, charts with a time base have become the standard in technical analysis. However, these three chart types are not always plotted with a time base.

Why are charts important in trading?

Charts are at the heart of trading. In addition to helping traders monitor the value of their current positions, they also help traders see where price has been, and in doing so, provide clues as to where price will go. Charts are at the heart of trading.