Technical Analysis For Futures - Learn To Trade Futures | Commodities Futures Trading Course

How To Read A Futures Trading Chart

At first glance, a futures trading chart looks much like a right triangle diagram in your high school geometry class.

Don’t worry, I’m not going to ask you about obtuse triangles or ask you the area of a square anytime soon.

Basically a futures trading chart consists of a horizontal axis and a vertical axis which measures prices over a period of time. This measurement of price is the basis of the trading method that is sometimes called, technical analysis.

A futures trading chart is a tool that every technical trader needs to have. Without a trading chart, there is no technical analysis.

Moving on now. The significance of using trading charts is to determine where prices oil futures trading chart have made congestion points or levels. These congestion levels are called support and resistance levels on a futures trading chart.

These areas of support and resistance are considered key areas as prices either move past them or move the opposite way when prices hit them. This tells us the strength or the weakness of prices as the approach these levels of support or resistance.

Many experienced traders can refer to these support and resistance levels as pivot points, because the act as "turning points" in the marketplace if those points are broken or sustained.

Above to the right, there is a picture of a oil futures trading chart (courtesy of TNT software by gecko) to show exactly where a resistance point is located. As you can see, futures price goes beyond the resistance at 47.99, but than close lower as it hits price resistance from a prior price area which pegs that prices for resistance.