Forex Dictionary Terms

Line Chart

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Definition – What does Line Chart mean?

A line chart is a basic type of forex chart that plots the closing price for each interval and connects all the data points with a line. Line charts can be set up to display the average price instead of the closing price, or multiple lines can be plotted to show the open, close and average. Line charts are most often used to evaluate long-term correlations between the price action of two currency pairs or a currency pair and some other variable like oil prices or gold prices.

ForexTerms explains Line Chart

Compared to other types of charts, a single line chart leaves out a lot of information. This can be a plus if a forex trader wants to filter out market noise. For example, long-term traders can use a line chart to quickly view the overall trend. For short-term traders, however, a single line chart doesn’t give enough information to be useful, so multiple lines may be added (or, more likely, a bar or candlestick chart will be used instead).

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