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Why line chart is important and it’s advantages

In construction of price chart we can see the price on Y axis and time on X axis

Construction of line chart

Line chart provides only close data of the data,it’s just connect series of close data on graph and gives us the merger data of time and price.

Illustration of line chart

If a stock Abc open on the 1 day at 100 and trade a high of 110 and at end of 105 close.

On 2 day stock Abc trade open at 105 and trade at high of 120 and get closed on 115

The line chart simply connect the day 1 close of 105 and on day 2 115 then the line chart will ignore the open data of stock and shows as on day 1 at 105 and on day 2 it’s shows 115

It’s not care about other data .

Advantage of line chart

It’s shows only close price.

There is less price noise on chart .

We can draw support and resistance easy with our eyes

No emotional trade like see candle like green and red panic if is big candle most of our emotions will get control

According to dow theory only close is important.

Disadvantage of line chart

Due to its nature we can’t get data like gap up open or gap down opens.

We can’t see high,low,open data.

We have more chart like

Point and figure chart

Renko chart

Candle stick chart

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