Replies to post #267111 on Zeev's Turnips Patch-No Politics (ZEEV)

[Huluriasquias]

Hi LG,

good to see you posting regularly again.

Let me help you with the technical part of the log/linear chart controversy.

Log scale is supposed to make more sense for the following reason:

Any chart usually spans a range of prices. For instance in the current yearly QQQ chart price goes from $28 to $39. A variation of +$1 is 3.5% at $28, but only 2.5% at $39.

Depending of the vertical position in the chart a fixed dollar change represent different % of change giving, in fact, a chart that flattens as it goes up in price.

For small vertical spans this discrepancy is negligible. In longer term charts that often show changes in price of 100% or more between the high and the low it really makes a difference.

What the log chart does is to present fixed % changes in the vertical axis: an inch of change in the top part of the chart represents the same % change as in the bottom part.

Log charts should be the only one used, but linear charts have been used forever, and for small ranges it makes almost no difference.

Huluriasquias.
(Formerly know as theRedDog)

[Newly2b]

That is the conclusion I arrived at, too, though I haven't nearly your years of experience with charting. I just watched what the people whose charting abilities I respected did, then copied it in my own charting. I started with linear and moved to semi-log, and now use only semi-log.

Thanks for all the good info, LG. Cheers,

N2B