Whether you’re new to trading in traditional or cryptocurrency markets, it is important to understand the tools available to investors and speculators to the best opportunity to make a profit. One of the most essential tools in your arsenal is charts. We’re going to give you a quick overview of the four popular charts: Line, Bar, Candlestick, and Heikin Ashi charts.
A simple line chart connects plot points against stated scales on the horizontal and vertical axes. When the points are then connected, the line that’s drawn indicates the changes which have occurred over x period of time.
In any chart analysis, line charts are beneficial for seeing broad trends, but it is important to understand what is being represented within the chart. Sometimes you will see more than one line, each line representing a different factor which may run parallel or crisscross each other within the chart.
Each point has a stable X,Y value which can be interpreted as true, but one thing to be aware of when reading line charts is that several lines on one chart does not necessarily mean one track mirrors another. Remember that the horizontal and vertical information is true. The points of data are the variables which move with the market thus creating the line patterns once the dots are connected.
Below is an example of a line chart for the monthly time frame of BTCUSD.