What kind of company do you picture when you think about organizations that sell their stock on the public market? If you're like most people, you probably think about technological giants like Microsoft, Apple and Google, or industry leaders like Nike. However, it's important to remember that these massive organizations weren't in operation when the stock American stock market was first created over two hundred years ago. The earliest stocks were those sold by the banks and federal government as a way of securing much needed funding for wars and financial stability. Some of the first companies on the stock market were those producing basic essentials, like cotton, oil, wheat and corn, and that's why we now have commodity charts.

In order to really understand commodity charts, and the way they operate in the overall market place, you have to have a generalized understanding of what commodities are, and how they are generally traded in the stock market. A commodity is considered to be a basic good used in commerce that can be interchanged without noticeable difference with other commodities of the same type. This means that although there are different commodities producers, the product is standard across brands (think about beef, coal, or sunflower oil. Another commodity characteristic is that it is most often a raw material used to make other, more refined products.

To be considered for trade on the commodity charts, these input materials are required to meet specified minimum standards, also known as the basis grade. Requiring this standard ensures that there will be relative conformity across brands, which in turn allows traders trust that the shares they purchase from one company will have the same value as those from other companies in the same industry. Commodities re some of the most actively traded stocks on the market, and many are listed in the Dow Jones Industrial Average.

As you might have guess by this point, commodity charts are used to track the buying and selling prices of commodities over time. Because commodities are long-term investments, they are often subject to a wide range of psychological and economic pressures, and fundamental analysis is usually appropriate making predictions about whether they are likely to grow or decline. Fundamental analyst's research value, demand, media attention and the financial history of the company to get an idea of the stock's past performance and future stability. Conversely, technical analysis is concerned only with price fluctuations over time.