How to Make Predictions From a Graph
Although nobody knows what the future holds, a diagram will allow people to predict the future on the basis of past experiences. For example, if a graph shows an upward trend in sales, an individual can predict reasonably that sales will continue to rise, as long as there is no change in variables.
Identify the graph meaning. It can be difficult to notice patterns when a person sees a table of data. The transformation of this data into a graph is another way to look at the same details. A chart will help you see patterns which do not seem so clear when you view the raw data, which makes predictions much simpler.
Enter a large data set in the diagram. In the short term, various sectors ebb and flow but show a steady long-term trend. For example, the US stock market often shows short-run volatility, but has shown steady growth in the long run. Ensure that your graph contains sufficient data to estimate accurately.
Search the graph for patterns. In the winter months, for instance, sales in an ice cream salon will likely decrease and then increase in summer months. This pattern can possibly be seen by a graph spanning many years of revenue. When you see the pattern replicated over a number of years, a plot that will make ice cream sales low in January and strong in July next year can fairly be expected.
Watch where the graph varies from the pattern. When an ice cream parlor, for example, had a fire and closed the door a year ago in July, then the profits were low. This is a divergence from the general pattern in the graph. Try defining the variables that could account for the variance when you see a deviation. Then, when you forecast future sales in the table, factor in certain variables.
Analyze those graph forms. A line diagram makes predictions reasonably simple since line diagrams display changes over a period of time. You can display past accomplishments in a line chart and forecast future results. You have to compare graphs from various timeframes and note differences between them in order to make predictions with bar graphs and pie charts.
Consider merging multiple bar graphs with different colors into one broad bar diagram for each period of time. By combining bar charts in this way, you can see patterns for various periods and find anomalies which are useful in the making of predictions more easily.
While previous performance is the best predictor of future performance, future performance is not guaranteed. In every sector, variables will change, causing patterns to change. Even if you are able to make a fair forecast of a story, forecasts are only well-known guesses.