Part Three — Reading the Chart
Chapter 7 — Line Chart Support & Resistance
A line chart draws only closing prices. It removes wicks, noise and intrabar emotion, leaving the prices at which each period was actually settled.
That matters, because a close is a form of agreement. Intraperiod spikes show where price was rejected; closes show where the market was willing to finish. Reference levels formed by repeated closes are often the cleanest levels on the chart.
Working a line chart
- Switch the higher timeframe chart to a line chart.
- Mark the prices where the line clearly turns — reach, change of direction, continuation.
- Note where several turns occur at a similar price.
- Switch back to candlesticks with those levels still drawn.
Illustrative example
Traders who only ever look at candlesticks often mark too many levels. The line chart is a filter — it shows you what the market settled on rather than everything it briefly tested.
Key concepts
- Line charts emphasise closes
- Closes reveal settled reference prices
- Simplification can reduce noise
Practical example
Repeated line-chart turns near one price identify an area to investigate with candles.
Common mistake
Marking every candlestick wick before identifying the structural reference.
Knowledge check
Check your understanding
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