## How do you trade with Line Break chart?

The simplest way to trade using 3 line break charts, is to wait until the market has made at least 3 lines in the same direction. Then wait until a reversal line has formed and enter in the direction of the reversal. This is the start of a new potential trend and we can get in nice and early.

Table of Contents

What is a Line Break chart?

The Line Break chart is a “more subtle form of point and figure charts, where reversals are decided by the market”, as described by a Japanese trader. It is made up of a series of vertical blocks called lines, that use closing prices to indicate market direction.

### How is a Line Break chart calculated?

The general rules for calculating a Line Break chart are: If the price exceeds the previous line’s high price, a new white line is drawn. If the price falls below the previous line’s low price, a new black line is drawn. If the price does not rise above nor fall below the previous line, nothing is drawn.

What is Line Break chart in technical analysis?

A Line Break Chart takes the current closing price and compares it to the closing price of a previous line. The most common Number of Lines setting is 3. What this means is that the closing price of the current line is compared to the closing price of the line 2 period’s ago.

## How do Line Break candles work?

A body of a candle in candlestick chat is a difference between open and close. In Line-break charts, body is a Line. Line of a Line-break chart is a difference between current closing price and a previous closing price. There are no shadows.

What is Renko strategy?

A Renko chart is a type of chart, developed by the Japanese, that is built using price movement rather than both price and standardized time intervals like most charts are. It is thought to be named after the Japanese word for bricks, “renga,” since the chart looks like a series of bricks.

### What is a Line Break example?

First, a line break cuts the phrase, “I mete and dole unequal laws unto a savage race,” into two at the end of the first line. Similarly, a break occurs in other lines like “I will drink life to lees,” “All times I have enjoyed greatly, have suffer’d greatly,” and “I am become a name.”

What is Line Break candlestick pattern?

It is a difference between two closing prices. A body of a candle in candlestick chat is a difference between open and close. In Line-break charts, body is a Line. Line of a Line-break chart is a difference between current closing price and a previous closing price.

## Is Renko better than candlestick?

The most striking difference between the Renko chart and the candlestick chart is how much smoother the Renko chart is. Renko charts may help day traders spot trends, areas of support and resistance, breakouts, and reversals.

What is a line-break chart?

Line Break charts display a series of vertical boxes (lines) that are based on changes in price. As explained above, normally closing prices are used for plotting these charts. It is possible to use high and low prices to construct the Line-break chart, but we will discuss that later.

### What are the construction rules for Lineline break charts?

Line break charts are defined by two values: the line break number and the underlying time interval. These values are used in the construction of the line break chart. The chart above is a 3 line break chart of the daily YM and in this case the construction rules are as follows, assuming the last line on the chart was a white line:

How to trade with 3 line break charts?

The simplest way to trade using 3 line break charts, is to wait until the market has made at least 3 lines in the same direction. Then wait until a reversal line has formed and enter in the direction of the reversal. This is the start of a new potential trend and we can get in nice and early.

## What are daily highs and lows on the line break charts?

Daily highs and lows are not shown on the line break charts, just closing prices. This needs to be borne in mind when back testing a line break chart trading strategy because we have no way of knowing how far price actually moved above or below the lines.