The stock market is all about speculation. About understanding trends and interpreting them to your own benefit. If you understand the way the market works, then maybe you can predict the fate of the market and make money from it. So, to be a trader on the stock market, the first prerequisite is to study the market trends in previous years and then be able to apply them to current trends.
For a trader, an informed guess can go a long way in making a profit. Let’s say the trader wants to invest in a particular stock. The first thing the trader will have to do is study the past trends of the stock, its ups and downs, and then guess whether buying those shares is a lucrative option or not. The easiest method of doing this is by studying something called a stock’s chart history.
Chart history provides the historical perspective of any listed stock. List the ups and downs of the stock over the years along with other aspects. For example, if a stock is doing well and an investor wants to invest in it, they are always advised to first check the stock’s chart history. The history of the chart will tell you when the stock previously boomed, how long it continued to boom, and when it started to decline and whether that decline was steady or rapid.
With information as enriching as this, the risks of investing in shares can be considerably reduced. Therefore, the importance of chart history cannot be undermined in any way for an investor.
Obviously the question arises, why a graph? Wouldn’t it be better to use raw data, for 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 simple numbers are turned into visually appealing schematic representations of that same data. This leads to better and faster interpretation of data that would otherwise take forever to understand.
Therefore, for any investor, a chart history of a stock is invaluable. The stock market matrix, significant swings, secular cycles, generation returns, distorted averages, and various other parameters are studied in one chart history. So understanding it is imperative. And instead of raw data, if this data is visualized, the process is greatly facilitated.