Technical Glossary / Chart Types & Price Representation
Line Chart
A chart that connects one price per period, almost always the close.
Teaching sketch. It shows the shape, not a live quote and not a trade signal.
Definition
A line chart throws away the open, high, and low and keeps a single point. That point is usually the closing price. The line between points is just interpolation. No trade happened at the prices on the line between closes.
How it works
Because intrabar noise is hidden, the swing structure can be easier to see. You cannot mark a wick rejection, an engulfing candle, or the true range from a line chart.
How to identify it
One continuous line, no bodies and no wicks. If the chart still shows a high-low range, it is not a pure line chart.
How traders use it
Line charts are useful for a first look at trend, for relative-strength lines, and for closing-price tools such as a moving average of the close. Drop back to candles before you place a level off a wick.
Common mistakes
Drawing support on a line chart and wondering why price "pierced" it. The pierce was a wick the line never showed.
Limitations
A line chart cannot display candlestick patterns, gaps inside a period, or the distance from high to low.
This note explains the term. A sketch shows the shape of the idea. Neither is a recommendation, a signal, or a comment on any security. Indicator settings and exchange conventions differ. Check the live chart and the contract specification before you use a number.