Line chart

A line chart plots one number for each period. That number is the closing price.

Join those closing points and you get a single line. Nothing else is drawn. The eye follows it easily, which is why it is the fastest way to see whether a stock is going up or down over a long stretch.

The cost of that simplicity is real. A line chart cannot show you what happened inside the day. It hides the open, the high and the low.

The workbook's chapter 15.2.1 gives a line chart 3 properties. It "uses closing prices over time as a continuous line." It "is ideally suited for quick trend visualization and long-term perspective." And it "does not capture intraday price movements i.e., open, high, low."

That last point is the whole trade-off. A line chart carries 1 price per period; the bar chart in 15.2.2 carries 4 — open, high, low and close — which is why the workbook calls the bar chart the one best suited to detailed price action analysis and to identifying volatility.

Beyond the count of prices plotted, the workbook gives no figure for a line chart — no period length, no smoothing, no minimum history. It is described by what it plots and what it leaves out, and that is what gets examined.

Illustrative. A stock closes at Rs 1,240, Rs 1,255, Rs 1,262, Rs 1,258 and Rs 1,271 over 5 sessions. A line chart draws exactly 5 points and one gently rising line. The trend is obvious at a glance.

Now look at what session 3 actually did. It opened at Rs 1,238, fell to Rs 1,210, then recovered to close at Rs 1,262 — a Rs 52 swing from low to close, more than 4% of the price. A trader with a stop-loss at Rs 1,220 was taken out of the position that day.

The line chart shows none of it. All it prints for session 3 is a dot at Rs 1,262. A bar or candlestick chart would have shown the full Rs 1,238 to Rs 1,210 to Rs 1,262 range.

Chapter 15.2.1 (Line Chart) is the first of the 6 chart types the workbook sets out in section 15.2, alongside bar, candlestick, point and figure, Renko and Heikin-Ashi.

The reliable question is a matching one: each chart type against what it is "best suited for." The line chart's answer is quick trend visualization and a long-term perspective. A second, sharper question asks which chart type ignores the open, high and low — again the line chart.

• A line chart plots closing prices, not the day's average and not its midpoint. The workbook is specific about this.
• "Does not capture intraday price movements" is the examinable weakness, and the workbook spells out what is lost: open, high, low.
• Candlestick patterns cannot be read off a line chart at all. Hammer, Doji and engulfing patterns are all defined by the relationship between open and close, and a line chart has no open.
• Simple is not the same as inferior. The workbook assigns the line chart a genuine job — long-term trend perspective — rather than treating it as a beginner's chart.