Commodity Trading Charts are only one element in the technical analysis that is involved in analyzing the commodities being traded on the commodity exchange. They are tools, which help in the Visual Analysis rather than the technical analysis of a given commodity.
An investor usually addresses the market as a whole and therefore is actually interested in analyzing the action of many different types of investors. A technical analyst therefore will usually be interested in using the commodity trading charts to go into the very minds of people involved through the medium of the charts.
The basic cornerstone underlying technical trading is the belief that fundamental information, political events, natural disasters and psychological factors usually result in some form of price movement. Therefore a person analyzing the commodity trading charts usually searches for certain formations or patterns, which indicate bullish or bearish shifts in fundamentals.
If the analysis is correct, an investor can quickly profit from the changes without necessarily knowing the specific reasons for them. Fundamental traders can also use commodity-trading charts. Since the market price itself usually reacts much before the fundamental information comes to light, analyzing the chart action can alert the fundamental analyst that something is happening and encourage closer market analysis.
Commodity trading bar charts are one of the more popular tools of traders as they include information on a particular futures market’s price movements, volume and open interest. Such charts are produced daily, weekly and monthly. They also facilitate the study of historical patterns that can help to provide a long-term perspective on the market.
In addition to studying commodity trading chart patterns, most traders and investors also analyze the moving averages, oscillators and other devices in ascertaining how bullish or bearish a market may be growing. Varied computer models are also used to check trend direction.
In India, these charts depicting the market movements are usually provided by well-known research organizations which track the movements of the various equities and commodities listed in the exchanges. Therefore, these commodity trading charts are easily available for traders who don’t want to invest time in generating market trend charts.