What Is a Line Chart?
Michael Whitman
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Trading since 2017, full-time since 2020
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YouTube creator, 137K subscribers
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Published 2026-09-14
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Updated
Line chart plots one price per period — almost always the close — and joins the points with a line. Everything else about each period is discarded, so a violent session and a quiet one can appear identical, which makes it the wrong chart for entries and the right one for long horizons.
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The line chart is the oldest and simplest way to draw price, and its whole character comes from what it leaves out rather than what it shows.
How to read it
One point per period, joined up. For a daily chart that is one dot per day at the closing price, and a straight line to the next one.
Three of the four standard prices are thrown away. The open, the high and the low never appear. A day that opened low, spiked to a new high, collapsed and recovered shows as a single dot at wherever it happened to finish.
So identical-looking points can describe opposite experiences. Two days closing at the same price, one of which traded in a range four times wider than the other, are indistinguishable.
Why the close, and not some other price
The close is the most consequential single price of the period. It is where positions are marked, it is what most settlement and valuation uses, and it is the price with the most participation behind it — the auction at the end of a session concentrates enormous volume.
It is also the price after the day’s argument has been settled. Intraday spikes often reflect short-lived imbalances; the close is what survived them.
That is the honest defense of the line chart. It is not simply a reduced candlestick chart — it is a deliberate choice to plot the single most meaningful number and ignore the rest.
Where it earns its place
Long horizons. A twenty-year candlestick chart is an unreadable smear; the same period as a line is legible at a glance. When the question is “what has this done over decades,” the discarded detail is noise.
Comparing several instruments. Multiple candlestick series on one chart is chaos. Multiple lines is the standard way relative performance is shown, and it works because each series is one value deep.
Anything where the level matters and the path does not. Index history, portfolio value, a yield over time — all naturally line charts.
A worked example
Take two hypothetical sessions in a $50 stock. One trades between 49.80 and 50.20; the next swings from 48.00 to 52.00, ten times the range, and both close at 50.00.
On a line chart none of that exists. The quiet day and the violent one appear as two dots at the same height, and the chart is flat across a session that covered ten times the ground of the one before.
Now put a stop on it. Any level chosen from a line chart has been chosen without knowing how far price actually traveled intraday. A stop that looks comfortably clear of the line can be well inside the range the market covered on several of those days.
That is the practical cost of the simplification, and it is the reason the chart type and the task have to match.
The original data
The S&P 500’s own history shows what a line chart is for. Drawn as closes, the 56.8% fall from 1565.15 in October 2007 to 676.53 in March 2009, and the climb back above that peak by 28 March 2013, read as one legible shape; as daily candles the same stretch is more than five years of bars.
The gap between an ordinary session and a violent one is the information a line chart deletes — ten times the range in the worked example above, invisible on the plot. On a chart of twenty years that deletion is a service. On a chart you are about to trade from, it is a missing input.
Volume is a separate series and a line chart does not imply anything about it — a point drawn on heavy participation looks exactly like one drawn on none.
What it is genuinely better at
Reading direction at a glance. With three quarters of the data removed there is nothing to interpret, so the eye follows the shape rather than parsing individual bars. On a long chart that is a real advantage and not a consolation prize.
Showing several series together. Relative performance between instruments is almost always drawn as lines, because overlaying candlesticks produces something unreadable. Anything comparative defaults to this chart type for that reason.
Plotting things that have no high and low at all. A portfolio balance, an interest rate, an economic series — none of these have an open or a range, so a line chart is not a simplification of them, it is the correct and complete representation.
And avoiding false precision. A candlestick chart invites reading meaning into individual wicks, much of which is noise. Stripping them removes a source of imagined signal along with some real information, which on a long horizon is a favorable trade.
How this connects
The simplest chart there is - closes joined up, with the open, high and low discarded.
That discarding is the point and the cost. It removes the intrabar noise candlestick patterns depend on, and removes the information they are built from.
Volatility becomes invisible. Two sessions with identical closes and wildly different ranges look the same, which is exactly what an ATR would have told you.
It is the honest default for a long horizon, where individual bar shapes carry little and the path matters more.
And technical analysis built on it is necessarily coarser - no wicks means no rejection, no engulfing, no doji.
When it fails
The characteristic failure is placing a stop or a level from a line chart. The line looks clean, a support level looks obvious, and the level is chosen against a series that never recorded how far price actually went. The market then trades through a zone the chart never displayed, the stop is hit on movement that was ordinary for that instrument, and the chart gave no warning because the warning was in the data it discarded.
A second failure is reading gaps. A gap between one close and the next open is one of the more informative events on a chart, and a line chart draws straight through it as though price passed continuously.
A third is assessing volatility from one. The chart’s smoothness is a property of the drawing, not of the market.
A fourth is using it for candlestick analysis, which is impossible by construction — every pattern needs the open, high and low.
And a fifth is assuming the close is objective. Closing auctions can be moved by large orders, and on thin instruments the closing print is sometimes the least representative price of the day.
Related
Candlestick patterns covers the chart type that keeps what this one discards. Technical analysis covers the wider tradition both belong to. And volatility covers the intraday range a line chart cannot show.
I use line charts for exactly one thing, which is looking at something over ten or twenty years without the noise. The moment you are deciding where to enter, the information a line chart throws away is precisely the information you need, so switching back is not optional.
— Michael Whitman
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