AtoZ Markets Ė Technical analysis studies price movements using charts most of the time. In this study, technical analysts and technical traders observe, focus, and analyze the price movementís history, current trading state, and future potential actions. It is one of the three market analyses together with fundamental analysis and sentiment analysis.

But why charts?

Studying price movements has never been this easy since charts are very visual. We can see the way the price behaved in the past and the present. As a technical analyst or technical trader, it is essential to learn how to use a price chart. It must be the very first tool that a technical analyst or trader has to know by heart. A chart visualizes the currency pairís price in a given time frame. Thanks to price charts, we can imagine trading activities in a trading period regardless if it is only a few minutes, hours, days, weeks, or even months. Charts are very effective tools for analyzing given data. They provide us with a basis for knowing the probability of risks since price changes are usually random events. We can take note of the currency pairís movements, patterns, and possibilities.

The x-axis and the y-axis

Just like in mathematics, plotting prices in a chart is no different. The x-axis is the horizontal axis that stands for the time scale. On the other hand, the z-axis is the horizontal axis that stands for the price scale. Now, the plotting goes from left to right, crossing the x-axis. The ones furthest to the right are the most recent. Today, again, charting has never been this easy since we are already in the modern age with technological advancement. We have computers, electronic devices, and the internet with us. Not only are they accessible anywhere, but it makes our lives easier since the software will be the one to draw the charts for us and we do not have to manually draw, write, and scale our charts.

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