Line Chart

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A line chart, also known as a line plot, line graph, or curve chart, is a style of chart that presents data as a succession of ‘markers’ linked by straight line segments. It is a simple form of chart that is used in many disciplines. It’s similar to a scatter plot, except the measurement points are ordered (typically by x-axis value) and joined with straight line segments. A line chart is frequently used to depict a pattern in data across time intervals — a time series – hence the line is frequently drawn chronologically. In this situation, they are referred to as run charts.

What Is A Line Chart?

A line chart is a graphical depiction of an asset’s historical price activity in which a sequence of data points are connected by a continuous line. This is the most basic sort of chart used in finance, and it normally merely shows the closing prices of a securities over time. Line charts may be used for any timescale, although they are most commonly used to display day-to-day price fluctuations.

A line chart shows traders exactly where the price of an asset has moved over a certain time period. Line charts remove noise from less crucial moments in the trading day, such as the open, high, and low prices, because they often only display closing prices. Line charts are popular among investors and traders because closing prices are a frequently observed piece of investment data.

Other common chart types include bar charts, candlestick charts, and point-and-figure diagrams. Line charts may be used in conjunction with other charts to help traders perceive a more complete technical picture.

EXAMPLE

Although a table representation of data is an excellent approach to display exact numbers, it might obstruct the identification and comprehension of patterns in the values. Furthermore, a table display is sometimes misunderstood as an objective, unbiased collection, or storage of data (and, in that sense, may even be misunderstood as the data itself), although it is only one of several alternative renderings of the data. Producing a graph or line chart of speed vs time aids understanding of the process described by the data in the table. A depiction of this type may be seen in the figure to the right. This graphic can help the viewer grasp the complete procedure in a single glance. This depiction, however, might be misinterpreted, particularly when presented as displaying the mathematical function) that describes the speed (the dependent variable) as a function of time. This might be misinterpreted as demonstrating speed as a variable that is only reliant on time. This would be true only if an item was exclusively affected on by a constant force operating in a vacuum.

However, such misinterpretation of the mathematical idea of something called A being a function of something called B as representing a causal link is frequent among laypeople (and promoted by the phrase “dependent variable”) and is unrelated to depiction in a line chart.

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Parts Of Line Chart

The x-axis and y-axis are two of the most important components of a line chart. Because its values are independent of everything else, the x-axis is also known as the independent axis. Because its values are reliant on variables on the x-axis, the y-axis is sometimes known as the dependent axis. Each of these axes is labelled with a form of data, such as weeks, months, and so on, while the y-axis is labelled with dollars or the amount of the item. The data points on the chart are labelled according to the x- and y-axes, which are united by a line in a dot-to-dot pattern. A line chart is made up of the following components:

Title: The title informs us what the line chart is all about, i.e., what information we may get from it.

Labels: The horizontal axis at the bottom and the vertical label along the side indicate the type of data shown.

Scales: The horizontal scale at the bottom and the vertical scale down the side indicate how much or how many there are.

Data points or dots: These indicate the (x,y) coordinates. A line chart can contain more than one data line.

Lines: Straight lines linking places provide estimated values between them. The line may be straight or curved.

Needs Of Line Chart

To see the evolution of a dependent variable across time: Line charts are ideal for mapping continuous data sets throughout time. Understanding changes that occur through time is somewhat easy for the human mind. Business owners want to see their revenues grow over time, content producers want to see their traffic grow over time, and government agencies want to see tax, health, and infrastructure data grow over time. It provides us with the finest backdrop for understanding what is going on and planning for the future.

To identify trends and spot spikes and dips: Line charts aid in the observation of patterns and the identification of significant performance concerns (either good or bad). Line charts allow you to pinpoint the precise moment anything out of the norm occurred, which aids in determining where to go for solutions.

To compare patterns from different regions: Multi-series line charts are used to compare the performance of multiple groups (regardless of how they are split – geography, internal teams, age groups, financial quarters, etc.). This aids in identifying important performance areas and quarantining situations that are negatively influencing performance.

How To Create A Line Chart?

Make a table: Create an x-axis and a y-axis on a page. Put a title at the top of the page that briefly summarizes the chart’s purpose.

Label each axis: If time is a factor, it should be shown on the horizontal (x) axis. The other numerical values, i.e., the measured dependent variables, should be plotted along the vertical (y) axis. Each axis should be labelled with the name of the numerical system as well as the measurements that will be utilized. For instance, you may label the x-axis with independent variables such as hours or months, indicating that each number printed on the axis represents the number of hours or months. Divide each axis into evenly spaced increments.

Add data: Data for a line chart is often provided in a two-column table that corresponds to the x- and y-axes. After you’ve entered your data, your line chart’s values will be immediately updated.

Make a key: If you’re comparing numerous objects, make a key that defines what each line is based on its color.

Best Practices To Use A Line Chart

  • Only use lines to link consecutive numbers on an interval scale.
  • To provide accurate insights, intervals should be of identical size.
  • When a user is focused on the trend of a certain line, extra information such as the line’s peak and lowest value might be useful.
  • Choose a baseline that is appropriate for your data; a zero baseline may not accurately depict the change in data.
  • Line graphs are only effective for comparing data sets if the axes have the same scales.
  • When creating charts for smaller devices, employ Sparklines – the data to ink ratio should be high, therefore remove extraneous items like as axis lines, axis titles, and so on.
  • Ensure that your chart has seamless interaction by using a cross line with an anchor and a value, hover on line should dim other lines, legend interactions etc. 

Types Of Line Chart

SINGLE LINE CHART

A simple line chart is made up of simply one line that depicts the relationship between two variables, such as the day of the week and the closing price of an asset. A basic line chart is the most frequent type of line chart used in everyday life. A simple line chart is seen in the figure below.

MULTIPLE LINE CHART

A multiple line chart is a line chart having two or more lines plotted on it. A multiple line chart is used when we need to illustrate data about two or more variables that have various data points based on the time period. This style of line chart is very handy when we need to compare data like temperatures, prices, etc. Look at the figure below to get a comparison of Mercedes-Benz costs in three cities.

COMPOUND LINE CHART

A compound line chart is useful for displaying data that has been segmented into several sorts and goes beyond the standard line chart. A compound line chart combines many data sets into a single graphic. A compound line chart, in other words, is a hybrid of a basic line chart and a multiple line chart. The graphic below is a compound line chart.

LINE CHART WITH ZOOMING AND PANNING

The zoom line chart is a sort of multi-series line chart that allows for the investigation of thousands of data points at both the macroscopic and microscopic levels. This examination is made possible by the zooming and panning functions. It is made up of several lines, each of which represents a category and the data points that correspond to that category. The chart can quickly plot thousands of data points, which would give indecipherable results on a standard line chart.

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SCROLLING LINE CHART

A scroll line chart is used to depict the amount of change over a period of time. Because of the chart’s scroll interactivity, a high number of data points may be presented on it. The chart is created by plotting data values as data points and connecting them with line segments. To browse across the chart, a horizontal scroll bar is presented at the bottom.

LINE CHART WITH MULTIPLE AXES AND SERIES

A multi-axis line chart is a type of interactive line chart that depicts data over many axes. This enables the display of data sets with varying units and scale ranges. Data values are represented as data points linked by line segments. Multiple y-axes are displayed on the chart’s left and right sides.

SPLINE CHART

A spline chart is a specific type of line chart that may be used to depict data that requires curve-fitting. Data values are shown as data points, much like in a line chart. However, instead of utilizing straight line segments to link the data points, this chart uses a fitted curve to do so.

STEP LINE CHART

A step line chart is used to depict patterns for a single event that is not continuous in nature. This chart not only allows you to examine the magnitude and change in values at different points in the same series for a particular data set, but it also allows you to determine the trend’s intermittent pattern. Data values are shown on the chart as data points that are joined by vertical and horizontal lines to generate a step-like progression.

Benefits Of Line Chart

  • It is useful for displaying changes and trends over various time periods.
  • It is especially useful for displaying minor changes that are difficult to quantify in other graphs.
  • Because they are straightforward, easy to comprehend, and efficient, line graphs are popular and successful charts.
  • It is effective for highlighting abnormalities within and between data series.
  • As a kind of comparison, more than one line may be plotted on the same axis.

Limitations Of Line Chart

Incompetent in Representing too many groups/ segments at once: When you plot too many lines on a chart, it becomes crowded. Experts recommend no more than four lines on a single chart; any more than that makes it harder to comprehend. If you must show more than four groups, combine the lesser ones together in  “Others” group.

Inaccurate insights may be provided by irregular class intervals: For the lines to be correct, data should always be drawn at equal intervals. When lines are used in a chart to link uneven or non-adjacent intervals of time, the information is misrepresented. Even if the class interval is normal, employing too many or too few classes might obscure key patterns in the data.

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