The world of financial markets can sometimes feel labyrinthine, marked by a dizzying array of assets and market movement, spanning from the foreign exchange (forex) market to the realms of stocks and cryptocurrency. A compass guiding market participants through these murky waters can be found in charts and graphs that visually represent market trends. Understanding these charts is a pivotal skill for those who study and participate in markets. In our era of information overload, the online education platform IM Academy and its IMpulse market scanner are trying to help students make sense of these charts, distilling complex information into easy-to-follow visualizations.
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Decoding the Language of Financial Charts
Market participants grapple with a plethora of charts applying to markets such as the forex market — the largest and most liquid market in the world — to the stock market. In recent years, the emergence of cryptocurrencies like bitcoin, ethereum, and countless others have added another dimension to the spectrum of assets market participants study and exchange.
At IM Academy, each of these markets is covered by a dedicated academy: FRX for forex, DCX for crypto, and SFX for stocks and futures. Students learn the basics of what to look for when studying market movements with charts.
For example, forex charts reveal how two currencies are performing relative to each other. Similarly, stock charts represent the performance of a company’s shares over a variety of timescales, from intraday to long term, providing insight into the company’s financial health, market sentiment, and potential risks. Crypto charts, while relatively new, are becoming increasingly important as cryptocurrencies become more widely exchanged and new coins continue to launch. Participants turn to these charts to look for patterns, such as candlesticks, and to compare the price changes of various coins over time.
In each case, charts serve as a road map depicting trends, patterns, and potential indications of where a particular asset might be heading. They’re the tangible visualization of the intangible market forces at play, including market sentiment, company performance, economic indicators, and geopolitical events.
Timescale: A Key Variable in Strategy
Beyond merely understanding the basics of charts, it’s essential for market participants to comprehend that different timescales can paint drastically different pictures. IM Academy offers a dedicated TBX time-based academy, and its approach to timescales permeates each financial academy. The choice of timescale in analyzing a chart largely depends on whether a participant opts for an intraday, swing, or long-term strategy.
IM Academy students are encouraged to learn the basics of each and apply the strategy or strategies that are the best fit for their preferred speed and activity level.
Scalpers, who exchange assets within the same day, typically examine charts in shorter timescales, such as minutes or hours. They try to capitalize on the volatility of the markets and these shorter timescales allow them to spot trends and make decisions quickly.
Market participants who utilize a swing approach hold assets over a few days or weeks and tend to study charts in daily increments. This approach allows them to analyze short-term trends without being swayed by the minute-to-minute fluctuations that scalpers assess.
Long-term strategy, on the other hand, involves analyzing charts over months or years. This approach is primarily interested in the long-term health and prospects of a company or market, and these broader timescales can potentially allow participants to see trends that short-term fluctuations may obscure.
IMpulse and IM Academy’s Approach to Charts
To help students with this time-based approach, IM Academy introduced IMpulse, a tool designed to make chart analysis more intuitive for online students. It breaks down market trends from complex charts into easy-to-follow visualizations, helping students better comprehend the inner workings of the financial market they prefer to study. Students can see the direction and momentum of movement across a variety of timescales and asset classes. They can access the tool from IM Academy’s app or website and it’s included with any financial education Academy offered.
Financial charts are not just symbols on a screen; they’re a visual language describing market movements and economic forces. The ability to understand them is a must-have skill for any market participant, and IM Academy emphasizes several approaches based on chart analysis. The goal with tools like IMpulse is to support the process of learning these skills by presenting an informative, but not overwhelming, amount of chart data.
Students around the world have been responding to this flexible online approach, and there’s a growing IM Academy presence in countries including France, Italy, Spain, and Germany. While the world of financial markets continues to get more complex, the Academy is trying to offer the tools that might help students better understand how to navigate it.
Note: IM Mastery Academy is not an advisory or broker service. IM Mastery Academy provides online educational services only.