The Line Chart

• Each trading day has four data points (OHLC):
  

1. Open (O)
2. High (H)
3. Low (L)
4. Close (C)

• Below are some of the chart types:
  

1. Line chart
2. Bar Chart
3. Japanese Candlestick

• The Line and Bar chart
  

1. The Line and Bar chart
2. Uses only one data point to form the chart
3. A line chart is formed by plotting a stock’s closing prices or an index

• Advantage
  

1. Simplicity
2. With one glance, the trader can identify the general trend of security.

• Disadvantage
  

1. Also simplicity
2. The line chart does not provide any additional detail.
3. Plus the line chart takes into consideration only the closing prices ignoring the open, high and low.
4. For this reason, traders prefer not to use the line charts.