Hello Lovely People
How's everything going on. I hope you're all doing very well. Today I'm writing homework task for professor @dilchamo which is about Effective Trading Strategy using Line Charts.
Let's Start.

Define Line charts in your own words and Identify the uses of Line charts.

In technical analysis, Line chart is an indicator that users use to determine the price movement of the same technical analysis. Line charts are the easiest way to indicate the evolution of the value of an asset for a given period of time. It is a very simple and understandable indicator for users who do not have experience, depending on what kind of trader you are, it can be used for short and long term, It is recommended to use for a long time as it may prove to be wrong for a short time. The line graph draws a single double line to determine the movement of an asset from any period.

Despite its simplicity, line charts have many important uses for traders. Its primary use is to visualize the evolution of the value of an asset quickly and easily. It also removes almost all the noise generated by the fluctuations.

These line charts are very useful and recommended especially for beginner traders as they provide a clear and easy way to see the price movement of an asset and identify trends, as you can easily see the line can explain the trend. The direction in which the price moves. Using only one parameter for line development, it significantly softens the noise generated in the market. Noise that can cause misinterpretations of price movements and even cause an inexperienced trader to incorrectly find support or resistance, something that is not on the line chart. A very important factor to consider is the level of support and resistance lines.

Source Tradingview

How to Identify Support and Resistance levels using Line Charts.

In all technical analysis, Support and Resistance levels are a very important point where you can see the constant struggle for market dominance based on buyers and sellers, which means they act as a starting point. These lines are important elements to keep in mind when conducting various trading operations. These lines represent the largest confluence of buyers and sellers, so demand and supply in these areas represent their greatest strength, which in turn reflects some kind of price reaction.

In the case of support lines, they act as a base that lies below the current price, representing a strong buying force that has the potential to keep the price from falling below that level. In cases when the price manages to break the support line, that line becomes a resistance to the next move.

It is very easy to point out the support area on the line chart, just look at the points below the current price, where the price is bouncing without setting a lower level.

Source Tradingview

Resistance lines act as a roof over current value. They represent strength on the selling side to keep prices from rising above that level. When that roof or resistance line breaks with the price, it becomes the support line for the next price movement.

To find the line chart resistance area, we need to point out the points above the current price, where the price is being rejected without being able to reach the high level.

Source Tradingview

Differentiate between line charts and Candlestick charts.

The main difference between the line chart and the Japanese candlestick chart is in the visual aspect. While the line chart is presented as a line running on an airplane, the Japanese candle stick chart is made up of a series of candles of different colors, sizes and waxes.

Source Tradingview

Regarding the information transmitted, the line chart shows the closing price as the single data for each period. This feature makes it easy to read and avoids the noise that appears on the Japanese candle stick chart.

On the other hand, the Japanese candlestick chart indicates other information such as starting prices, height, low and closing price for each period, which translates into more complete information, but with more noise or disturbing elements.

Explain the other Suitable indicators that can be used with Line charts.

There are lot of very useful indicators for line charts, many of them can be trend indicators, as it is always advisable to combine the line chart with another technical tool or indicator to verify the price movement of an asset before making a trading decision, this time using Exponential Moving Average (EMA) as it Calculates the average price over a period of time. Over time, this helps to identify and confirm the average market trend, this indicator helps to increase the accuracy and effectiveness of operations while taking advantage of the market direction and thus our profit margins.

When the price goes above the average line it is in the upward trend, if on the contrary it goes below the average it is in the downward trend, if the moving average breaks out it changes the trend.

While the price is moving further away from the moving line, it can be explained that the trend is getting stronger. If, on the contrary, the price approaches the moving average line, it is a sign that the trend is losing its strength. This is one of the major benefits of using this indicator, as it allows us to determine the strength of the trend.

Source Tradingview

It is also important to note that the EMA line fulfills the function of dynamic support when the trend is bullish, while it provides resistance if the market is bullish. Usually when we point to a trend with tremendous momentum, then at some point the price retreats and tends to reach the support and / or appropriate resistance to find the moving average, in which the moving average is as high, the support or resistance that provides the price will be strong.

Source Tradingview

According to the TRXUSDT pair chart we can see that when the price moves above the moving average, that is, in an upward trend, the price reaches the EMA line to find support, in which case the price rises again and returns to its original trend continues. The trend changes after the breakout of the moving line, we can see that the price goes below the EMA line, then the price moves closer to the resistance line, when it rebounds this trend resumes the original direction of which is declining in this case.

Prove your Understanding of Bullish and Bearish Trading opportunities using Line charts.

It is very easy to pinpoint the market trend through line graphs, however it is advisable to use a strategy, tool or technical indicator before making any trading decision, to enhance the accuracy and effectiveness of this operation. And take advantage of the opportunities offered by the market and make a profit. In that case I would use the Exponential Moving Average (EMA) indicator to confirm the trend.

Bullish Trading Opportunity

Source Tradingview

In the line chart according to the ETHUSDT pair in the 5 minute time frame, use the EMA technical indicator, here we can see that the trend has changed, the price managed to break the EMA line after a strong upward momentum and began to move forward above the Moving Average, this is a signal of a bullish trend. There was a slight retreat in approaching the Moving Average but it bounced back and continued its bullish momentum. And to confirm it, place a buy order for a stop order. Loss below the moving average at the last low level, assuming a 1:2 risk reward ratio.

Bearish Trading Opportunity

Source Tradingview

In the line chart corresponding to the ETHUSDT pair in the 5 minute time frame, use the EMA technical indicator, here we can see that the trend has changed, the price has managed to break the EMA line after a strong bearish momentum and began to move forward. Below the moving average, this is a down trend signal, indicating trading opportunities confirming the continuity and strength of the trend, therefore setting the stop loss above the moving average, assuming a relationship risk reward of 1:2 ratio.

Investigate the Advantages and Disadvantages of Line charts according to your Knowledge.

Advantages	Disadvantages
It's easy to interpret, it doesn't require much knowledge or experience.	It does not provide enough information to make timely and accurate business decisions.
Graphic representation is very simple and easy to understand.	Marketing trends need to be combined with other tools, strategies or technical indicators to perform trading operations.
It only looks at the closing price while filtering the market noise.	Difficulty setting up stop loss and take profit points correctly.
This allows you to quickly and easily identify market trends.	These are mostly used by beginner traders.
Easy to identify support & resistance levels. It can be used in any time frame.	It cannot be used for short term as it may give wrong signal.

Conclusion

Line charts are the easiest way to represent the evolution of the value of an asset over a period of time. This type of graph is made up of a series of points connected by a continuous line. Each of these points represents unique data, which is usually the end of the price. This is because it provides strong support in trading which works in favor of trend movement. Lastly I would like to thank Professor @dilchamo for this wonderful lecture and makes us understand it easily.