what is a line chart used for 
a line chart serves several key purposes in finance and investing making it essential for analysts traders and investors here are some of its best uses 2while versatile and widely used in finance and investing line charts are not optimal for every analytical scenario here are some situations when it s best not to use line charts 2recognizing when a line chart is inadequate and opting for more sophisticated tools or charts is crucial for accurate analysis and decision making for instance trading and investing platforms offer a range of chart types and analytical tools that cater to different needs in financial analysis in addition financial modeling software ordinarily includes various chart options to suit different types of data analysis pros and cons of line chartstraders can be overwhelmed with too much information when analyzing charts the trading phrase paralysis by analysis describes this phenomenon using charts that show too much price information or too many indicators can give confusing signals and complicate trading decisions however a line chart helps traders pinpoint key support and resistance levels trends and recognizable chart patterns for example the line chart below makes it easy to find major support and resistance levels between 2 10 and 2 70 before the price drops below support line charts are also ideal for novice traders because of their simplicity they help to teach basic chart reading skills before advanced techniques such as reading japanese candlestick patterns or learning point and figure charts volume and moving averages can easily be put into a line chart line charts can be constructed manually or by using apps and software such as microsoft excel or google sheets making it quicker and more accurate however line charts may not have enough price information for some traders to monitor their trading strategies some strategies require prices derived from the open high and low also traders needing more information than the close to test their trading strategy will have to find other charts candlestick charts which contain an asset s daily open close high and low prices in the same graph may prove more useful 3clarity and simplicity line charts offer a clear straightforward view of price moves over time easy to use line charts are easy to read and interpret even for those new to finance and investments focus on closing prices by zeroing in on closing prices line charts filter out intraperiod volatility which could be beneficial for long term investment strategies comparative analysis line charts are useful for comparing several securities or indexes over time since the simplicity of the lines lets you make easier comparisons without clutter lack of detailed information line charts only show end of period prices omitting important data such as high low and opening prices which are frequently critical for investment strategies oversimplification the simplicity can also be a drawback as it may lead to overlooking price moves and volatility which are important for traders and investors risk of misinterpretation the focus on closing prices might give a misleading picture in markets where intraperiod changes are significant 