August 2011
Beginner
281 pages
5h 12m
English
Content preview from Charting Made Simple: A Beginner's Guide to Technical Analysis
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Chapter 2: Charts
Charting is the backbone of technical analysis, and many types of charts are used. In this chapter I’ll describe the charts that are commonly used and the advantages and limitations of each one.
Price charts
Because technical analysis is all about price action, the chart you’ll most often want to look at is a price chart. In this type of chart price is shown on the y axis and time is shown on the x axis, as shown in figure 2.1 (overleaf).
Price scale
The price scale is usually linear; that is, the distance between each division is the same. For example, the distance between 1 and 2 is the same as the distance between 2 and 3, and so on. Another option is to use a logarithmic price scale, and in this scale the distance between ...
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