Will someone explain to me the difference between looking at a stock chart with a logrithmic scale or a linear one.
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Logrithmic or Linear
- Thread starter rcarlton88
- Start date
Not only the difference but what the advantages/disadvantages are of each.
Thanks
Thanks
Let's take an example of the stock moving from 5 to 10 and from 50 to 55.
On a linear scale the 2 moves would look the same as they are both 5 points.
On a log scale the moves won't be the same, cause a move from 5 to 10 is 100%, and from 50 to 55 is only 10%.
For intraday charts linear is OK, but for longer term charts you need to look at log scale so that the same % moves are displayed accurately.
On a linear scale the 2 moves would look the same as they are both 5 points.
On a log scale the moves won't be the same, cause a move from 5 to 10 is 100%, and from 50 to 55 is only 10%.
For intraday charts linear is OK, but for longer term charts you need to look at log scale so that the same % moves are displayed accurately.
Thanks for the replys,
If I go to a finance site for example Google Finance and go to Apple (AAPL) and view the stock for the past several months, the only difference the chart shows between Log and Linear is that it shifts up 1/2 of a mm in the Log graph compared to Linear.
Is that correct?
If I go to a finance site for example Google Finance and go to Apple (AAPL) and view the stock for the past several months, the only difference the chart shows between Log and Linear is that it shifts up 1/2 of a mm in the Log graph compared to Linear.
Is that correct?
Quote from rcarlton88:
Thanks for the replys,
If I go to a finance site for example Google Finance and go to Apple (AAPL) and view the stock for the past several months, the only difference the chart shows between Log and Linear is that it shifts up 1/2 of a mm in the Log graph compared to Linear.
Is that correct?
If you look on the price scale you'll see that a linear scale is evenly spaced, a log scale will be drawn out at the bottom and "squished" at the top to account for % moves rather than $ moves.
On a longer time frame it is clearly visible. Just try AAPL 5 years.