So What's in a Chart?

[barjon]

At a bit of a loose end and escaping from the heat I thought I'd re-read the excellent GammaJammer's articles of life in the real world of forex. First one here A Day in the Life of a FX Spot Desk Trader (Part 1) .

All about numbers and trading in the interests of risk containment with a "chart" never in evidence.

So there we are gazing at charts and expecting them to make sense of the sort of activity GJ got up to as he moved millions around for a variety of different reasons. Mmm, maybe, maybe not

 

[Mr. Charts]

"So What's in a Chart?"

A summary of the record of actual trades printing off, that is, past price movement showing prices achieved within specific time frames.

In other words a two dimensional record of prices rather than the three dimensional activity that has actually taken place which you can sometimes see in depth of market, time and sales.

The chart is on the surface, depth and T&S are below the surface where they sometimes can show direction before anything appears on a chart. Looking at the surface of the sea only, you can't see the life that goes on in the depths, or the submarine that might soon break the surface. With depth of market and T&S you can sometimes, not always, see the pressures that result in price movement before the price actually moves.
Richard

 

[barjon]

"So What's in a Chart?"

A record of actual trades printing off, that is, past price movement showing prices achieved within specific time frames.

In other words a two dimensional record of prices rather than the three dimensional activity that has actually taken place which you can sometimes see in depth of market, time and sales.

The chart is on the surface, depth and T&S are below the surface where they sometimes can show direction before anything appears on a chart. Looking at the surface of the sea only, you can't see the life that goes on in the depths, or the submarine that might soon break the surface.
Richard

All very true, Richard, but I was thinking about the complex world of forex - a vicious animal whom I keep well behind treble locked doors - and how the various transactions conducted by GJ (and presumably similar sorts of things by many of his ilk) have any relevance in terms of price action analysis. Different ball game in the more sedate world of equities maybe.

 

[scose-no-doubt]

Policy makers like to operate within exchange rate "bands" and judging by my short Q&A session with a (former?) BOE committee member, they view value as quite elastic, so you can see past action and range extremes. IMO short term FX charts show absolutely f**k all but there's others on here who'll swear they do and they make money from the markets rather than studying them like yours truly so pick your poison.

*edit - he's still on the MPC as per wiki

 

[Rambo35]

Everything you need to know for your next trade, at least in my opinion.