Do You Need Charts?

Let’s talk a little bit about why you might need charts or what makes charts important or a decent tool to use for trading. Well, first of all you don’t need charts, but they can make things easier for you depending on what your trading style is. They help you visualize the price action. They help you get a perspective because you can view a lot of data at once. After all they are just made up of a combination of all the trade prices over time. Also, you can overlay different categories of studies on the chart data which might give you better insight into price action and where the price might be heading. Charts can help you identify and recognize repeating patterns, like ranges. which might translate into tradable events. For those reasons it’s not a bad idea to at least become familiar with charts and decide if they are good for you.

Just a word of caution, a lot of traders, especially beginning traders, get infatuated with all the different studies they can put on the chart and they end up doing more harm than good to their bottom line. Because there is so much confusing stuff on the chart that really doesn’t mean anything, they end up getting confused and overwhelmed by the data. So, it’s good to be aware of many of the different studies that you can overlay on a chart but to recognize that you are probably going to do best by having a clean chart with almost no indicators on it and get used to watching the depth of market and time and sales and use the chart as a quick way to visualize where price has been.