Line Chart Explained: The Simplest Chart Type

A line chart is constructed by connecting an instrument's closing prices over a series of time periods with a single continuous line, creating the simplest visual representation of price movement over time.

A line chart shows only the closing price for each period, without displaying the open, high, or low prices within that period. This makes it the least detailed of the common chart types, but also the clearest and least visually cluttered, since it strips away the additional price information shown on bar or candlestick charts.

Line charts are often used for getting a quick, high-level overview of general trend direction (covered in the previous unit) without the visual complexity of more detailed chart types. They can also be useful for comparing the relative performance of multiple instruments on the same chart, since the simplicity makes overlaying multiple lines easier to interpret.