Learn to use Line charts
Line chart is one of the most popular chart types along with the bar and candlestick charts. It is widely used in the industry as it's simple, easy to understand, and provides clear price visualization. It displays an asset's price over time with a line connecting data points.
CONTENTS:
What are line charts
As a basic chart type, lines are perfect for beginners. Also, they can help you quickly understand an asset's performance and see the overall trend.
Lines are usually built using the close prices as it is considered the most important along the open, high, and low prices. This approach reduces extra noise which is created by other price levels.
Furthermore, line charts come in different forms and can be customized to display other prices — we'll get back to it a little later.
However, all these aspects make line charts less informative for more complex analysis — they may not provide enough information, which can result in wrong interpretation.
Due to their simplicity, line charts are perfect for price comparison. Several lines can be easily displayed in one layout to provide a clear picture without clutter. This feature allows traders to contrast assets’ performance, which is especially useful for comparing a security’s performance against another.
On our Supercharts, you can display several symbols on one chart. To do that, click the "Compare" or "Add Symbol" on the upper toolbar.
Line charts vs candles
Both of these are considered standard chart types. You can use both of them — and we recommend doing so.
No chart type can provide you with all the information needed for a comprehensive analysis. Some are more advanced and give you better understanding at some points, but still lack the benefits of others.
Line charts
- Help with trend analysis
- Help you more easily compare multiple assets on a single chart
- Help you better read some indicators and drawing tools due to less space they take up on the Supercharts
- More suited for dashboards
Candle charts
- Provide more data, which can sometimes misguide you
- More complex — due to many candle patterns — than lines and require more time to learn them
- May contradict indicators and drawing tools, creating more uncertainty
Enabling the chart type
Once you are on the Supercharts, open the chart type menu on the upper toolbar, and select "Line."
Settings
To make the most of the line chart, you can customize it according to your preferences and needs.
To do this, find the gear-like "Settings" button on the upper toolbar, and go to the "Symbol" tab.
The "Line" section lists settings specific to this chart type:
- Price source: Choose the price you want the chart to show. By default, it is set to close price meaning the line will be plotted by connecting the asset's closing price in a sequence. According to your trading style, choose the desired price:
- Open: The chart will show the opening prices
- High: Shows only the highest prices
- Low: Shows only the lowest prices
- Close: Shows only the closing prices
- (H + L)/2: Shows the average of the highest and lowest prices
- (H + L + C)/3: Shows the average of the highest, lowest, and closing prices
- (O + H + L + C)/4: Shows the average of the opening, highest, lowest, and closing prices
- Line: With this setting on, the color of the line, its thickness, and opacity can be changed according to your preferences. Here, you can also choose between a gradient and a solid line.
Line charts in a nutshell
This chart type is a great starting point to start studying technical analysis. They can help you quickly understand the asset's trend by providing you with the most important — close — price levels.
Line charts are great for both light-weighted analysis and those focused on utilizing drawing tools and many indicators.
Also, you can include them into your presentations and reports for stakeholders or your audience.
We encourage you to deepen your knowledge in technical analysis by learning other chart types, drawings and indicators to enhance your view with other trading tools.
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