What a Difference - Log vs Linear?
posted Jul 28, 2004 at 06:00PM
Linear Scale Chart
Log Scale Chart
Given that I think in terms of "precentage gains" and "percentage losses" I tend to always use log scales on my charts.
Notice how on weekly log you have evidence of a break while on the daily log chart support is holding.
Thoughts. Obviously a linear chart will give a different perspective than a log chart. You need to know what you are looking at. From the examples above a chart will break a log trend-line before a linear one.
Makes me appreciate the use of moving averages a bit more.
A more detailed discussion on price scaling is available at the Stockcharts Educational center..just click the link below (price scaling is about half-way down)... a short but important read.