#cryptocharts101 What You Need to Know About Charts in Trading

Trading charts are an essential part of any technical trader's tools. Let's examine how they work, the main types of charts, and how to read price action at a glance.

Price Vs Time

Any chart will always display price and time on its two axes.

Time is on the X-axis

Price is on the Y-axis

Thus, a chart shows how the price of a market has changed over time.

You can choose the timeframe you want to highlight on your chart. For a short-term view, you might examine a five or 60-minute chart. In a five-minute chart, each point will represent five minutes of price action.

But if you're thinking about making position trades or swing trading, you might want to look at something more long-term, from a week to a month, or even a year.

What are the different types of charts?

There are three main types of trading charts you can use: line charts, bar charts, and candlestick charts.

Line charts are essentially line graphs. They show the overall price movements of a market over a given period.

Bar charts and candlestick charts provide you with additional very necessary information. Both will indicate the high, low, open, and close prices of a market over a given period.

Bars

Bars show price action as a series of straight lines, with two short lines extending from them.

Candlesticks

Candlesticks show price action as a wider body, with a line or "wick" extending from the top and bottom.