What Is Technical Chart

What is a Technical chart?

What is a Technical chart?

A chart is usually defined as a graphical or diagrammatical representation of a data in numerical, tabular or different structures. Here we need to understand that we are going to discuss it in terms of “future price actions”. i.e. a series of prices over a set time frame.

What is Technical Analysis?

Technical analysis is usually considered as a trading tool which helps to evaluate the past price movements and attempt to forecast their future movement by analyzing statistics gathered from trading activity.

Different Charts involving various structures are prepared with commodity information like prices and volume. This is purelybased on analyzing current demand-supply of commodities, indices, futures or any tradable instrument.

Two important factors that are considered in Technical analysis:

A. The current price

B. History of price movement

Three major assumptions we have in Technical analysis:

A. The market discounts everything

B. Price movements based on trends

C. History trends as to repeat itself

What is Technical Chart Time?

technical chart

The applicability of the Technical analysis may range between the following Time frame:

Intraday (1-minute, 5-minutes, 10-minutes, 15-minutes, 30-minutes or hourly), daily, weekly or monthly price data and last a few hours or many years.

Right Time frame for Commodity Traders

Day Trader : 5 - 15min Charts

BTST Trader : 30min - hourly Charts

Positional Trader : Daily Charts

Contract Carryover : weekly Charts

Strengths and Limitations of Technical Analysis

Strengths Limitations
Focus on price Economic data
Pictorial price history System breakout
Predefined calculation entry on exit Too late (Signal followers)