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Read a Line Chart

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Line Chart

Line Chart

Line charts are not the most popular trading charts, because of the limited trading information that they represent, but they are easy to read and interpret.

Line charts consist of individual points, that are connected with straight lines. Usually, each point shows the close of the timeframe, but this can usually be modified to show any one of the open, high, or low. Line charts also show the direction (upward or downward) of the timeframe.

Line charts are read and interpreted during trading as follows (view full size chart):

Difficulty: Easy
Time Required: 5 Minutes

Here's How:

  1. Open - The open is the first price traded during the timeframe, and if the line chart is setup to show the open, it is indicated by the points on the line that correspond to the timeframe (e.g. every 1 minute).
  2. High - The high is the highest price traded during the timeframe, and if the line chart is setup to show the high, it is indicated by the points on the line that correspond to the timeframe (e.g. every 1 minute).
  3. Low - The low is the lowest price traded during the timeframe, and if the line chart is setup to show the low, it is indicated by the points on the line that correspond to the timeframe (e.g. every 1 minute).
  4. Close - The close is the last price traded during the timeframe, and if the line chart is setup to show the close, it is indicated by the points on the line that correspond to the timeframe (e.g. every 1 minute).
  5. Direction - The direction of the line is indicated by the locations of the points. For example, if the most recent point is above the previous point, the timeframe has been an upward timeframe, and if the most recent point is below the previous point, the timeframe has been a downward timeframe.
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