In this post we will find few steps to do chart analysis, so that we can come to objective conclusion about the instrument.
While analysing any instrument, we need to have good understanding about following:
Trend
Strength
Volatility
The above three will give a clear picture about what is the current state of instrument. Each carry different information to define what & how will be the future price movement.
In Financial market, to understand & to evaluate price of an assert, we need to know the histroy of that assert's price. By plotting price against different time period, we can understand the price movement of the assert. One way of representing price wrt time, is using candlestick chart.