Financial Charts – Understanding The Chart History Of The Stock Market

The stock market is all about speculation. About understanding trends and interpreting them to your own benefit. If you understand the way the market rolls then you can maybe predict the fortunes of the market and make your money out of it. So to be a trader in the stock exchange, the first prerequisite is to study the trends of the market in previous years and then be able to apply them to current trends.

For a trader, an educated guess can go a long way in profit making. Say the trader wants to invest in a particular stock. The first thing that trader will have to do is study the past trends of the stock, its ups and downs and then guess if buying that stock is a lucrative option or not. The easiest method of doing this is by studying something called the chart history of a stock.

The chart history gives the historical perspective of any listed stock. It lists the ups and down of the stock over the years along with various other aspects. For example, if a stock is flourishing and an investor wants to invest in it, he is always advised to refer to the chart history of it first. The chart history will tell him when the stock had flourished previously, how long it had continued to flourish and when it had started decline and whether that decline was steady or rapid.

With information as empowering as this, the risks of investing in stocks can be reduced greatly. Thus the importance of chart history can in no way be undermined to a investor.

The question obviously arises, why a chart? Would it not be better to use raw data, as a reference? Well the answer is simple. A chart can take that financial data and visually represent it in such a way that trends and inconsistencies become very apparent. What would otherwise be rows and rows of plain numbers become visually appealing diagrammatic representations of that same data. This leads to better and faster interpretation of the data that would otherwise take forever to make sense of.

Thus for any investor, a chart history of a stock is invaluable. Stock market matrix, significant swings, secular cycles, generation returns, distorted averages and several other parameters are studied in a chart history. So understanding it is imperative. And instead of raw data, if this data is visualized, the process is facilitated greatly.

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