Master the fundamentals of line charts, the most basic yet essential tool in technical analysis. Learn how to identify trends, patterns, and key price movements using this simplified visualization method.
A line chart is the simplest form of price chart used in technical analysis. It displays a security's closing prices over a specific time period by connecting individual data points with a continuous line. This creates a smooth, easy-to-read visualization that highlights the overall price trend.
Line charts focus exclusively on closing prices, which many analysts consider the most important price point of any trading session. By filtering out the noise of intraday price movements, line charts provide a clear picture of the underlying trend direction.
Try it: Hover over the chart to see individual data points. Notice how the line smoothly connects closing prices, making it easy to identify the overall trend direction.
Line charts excel at showing long-term price trends over months or years. They help identify major support and resistance levels without the distraction of short-term volatility.
New traders benefit from line charts' simplicity. They provide a clear introduction to chart reading without overwhelming complexity.
When comparing price movements across different timeframes, line charts offer clean, comparable visualizations.
Line charts work well when combining technical analysis with fundamental analysis, focusing on closing price trends rather than intraday movements.
What is the overall trend in this chart?
Identify the approximate support level in this chart: