All chartists hold to the basic theory that post patterns of price movements, properly analysed, can be used to predict future price movement. In short, all the information necessary to predict reasonably the direction in which the market will move is contained in the chart patterns.
Chartists do, however, differ as to which charting method they consider to be most effective.
In this section, we will explore the three basic charting techniques. This is the type of chart that we first learned to construct in elementary school. Many securities analysts use line charts to show the closing prices of an index or a particular stock over a period of days or months. This is the simplest charting technique used by technical analysts. Price is indicated on the chart's vertical axis, and time is indicated on the horizontal axis.