How to Read a Price Chart
A price chart shows how the price of an asset has changed over time. The horizontal axis is time and the vertical axis is price. Learning to read one takes a few minutes and makes every asset page on this site more useful.
Choose the right time frame
The same asset can look calm on one chart and wild on another. A one-hour chart shows short-term noise, a one-year chart shows the broader direction, and a ten-year chart shows how the asset behaved through several market cycles. Looking at more than one time frame prevents you from reading too much into a single move.
Trend: up, down or sideways
If the line mostly climbs, with each low higher than the last, the trend is up. If it mostly falls, the trend is down. If it moves in a band without a clear direction, the market is moving sideways. Trends can change, so they describe the past, not a promise about the future.
Highs, lows and range
The highest and lowest points on a chart show the range the price covered during that period. On our asset pages the top and bottom labels on the chart show these values. A price near the top of its range is not necessarily "expensive", and one near the bottom is not necessarily "cheap".
Percentage change
The daily change is shown as a percentage. A one percent move on a stable asset can be big news, while the same move on a volatile one may be ordinary. Compare the change with the asset's typical behaviour.
Common mistakes
- Reacting to a single day or hour.
- Assuming a past pattern will repeat.
- Ignoring the scale: a chart that does not start at zero can make small moves look dramatic.
- Forgetting the news: earnings, interest-rate decisions and geopolitical events often explain sudden jumps.
Charts are a tool for understanding what has happened. They cannot predict what will happen next.
More guides
- What Is Market Capitalization?
- What Moves Currency Exchange Rates?
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- How Cryptocurrency Prices Work
- Understanding Stock Market Indices
Disclaimer: this article is for education only and is not investment advice. See our Terms & Disclaimer.