The chart as a record

A price chart is a record of trades that actually happened. The horizontal axis is time, the vertical axis is price, and every point on it is a moment when a buyer and a seller genuinely agreed at that price. It reads from left to right, with the most recent data at the right edge. Nothing appears on a chart that is absent from the record — a chart merely lets the eye take the same numbers in faster — and its most important limit follows from that: a chart shows the past, never the future. The common misreading treats the chart as a document that encodes what comes next and treats technical analysis as the craft of decoding it. Technical analysis is nothing of the kind; it turns past behaviour into probability scenarios, not prophecies. Even the scale of the vertical axis can make the same data look violent or flat. This is the foundational sentence of risk literacy: you look at a chart to ask what has happened and what it shows right now, never what will happen.

This content is educational information, not personalised investment advice. The chart examples are illustrative.

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