Technical analysis I

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7. Line charts

This is the simplest form of chart available to the technical analyst with time presented along the X-axis and price on the Y-axis. The actual time function that you plot will depend on your position in the market - a market maker will be interested in price fluctuations on a minute-by-minute basis, whilst the average investor will only be interested in a price on a daily or even weekly basis. Any price may be plotted on a line chart, but the most common is the closing, mid-price.

Example

A line chart showing the rise in value of the Bank of Scotland’s shares

Click here for the full size graph.

The largest benefit to the analyst of drawing line charts are their simplicity. They present an uncluttered picture of price movements and are very easy to understand.

1. What is technical analysis? 2. Technical analysis compared to fundamental analysis 3. What technical analysis is not 4. Dow Theory 5. Price data 6. Volume data 7. Line charts 8. Bar charts 9. Volume charts 10. Point and figure charts 11. Other types of chart 12. Trends - the basics 13. Simple trend lines 14. Making money from trend lines 15. Trend channels 16. Support and Resistance 17. Breakouts 18. Is technical analysis for you? 19. Software for technical analysis 20. Conclusion

• An Introduction to Technical Analysis - Reuters Financial Training Series
• Technical Analysis Plain and Simple
• Technical Analysis of the Financial Markets
• Martin Pring's Introduction to Technical Analysis