A line chart is a graphical representation of data in the form of connected plot points. These plots are also referred to as data points or markers. These points are joined by line segments which are ordered by their associated x value. Line charts are typically used to graphically represent a trend in events over time.
The most common use of line charts is to represent a trend or behavior of data over time intervals; thus, it is often chronological. When it represents this type of data, it is often referred to as a run chart due to the significance of the run or x value, which represents time. It is preferred as a means of expressing this type of data because it simplifies finding and analyzing patterns in data, and it is especially useful with large datasets. A table which lists data types and corresponding values may be generally useful with a small set of information or for finding exact values, but it cannot be employed effectively for hundreds of values or for quickly recognizing and isolating patterns.
Line charts are employed heavily business intelligence and finance. In the realm of business, these tools aid in optimizing and improving operations. They are also employed to find and resolve problems that impact revenue. They are especially important in the age of real-time business data and global networks of supply, production, and distribution. In the realm of finance, they are employed heavily by both day traders and growth investors. Day traders and other analysts must utilize real-time data to make a wide variety of decisions, and those decisions are well beyond the scope of what to buy and at what price. They use line charts to maintain awareness of patterns and of the relationships within the market. Growth investors also utilize these charts to review long-term trends and relationships within the market.
Line charts are often paired with best-fit layers. These are mathematical functions which represent the best-fit or approximation of the trends within the chart. This function is achieved through a line connecting certain data points. This practice often suffers from issues with accuracy, however, they have proven to be viable in analyzing trends.