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<font size=2 color="#003300"
face=Arial>Petros,
<font size=2 color="#003300"
face=Arial>
<font size=2 color="#003300"
face=Arial>Can you explain?
<font size=2 color="#003300"
face=Arial>
<font size=2 color=black
face=Tahoma>-----Original
Message-----
From: Petros Lazos
[mailto:peter_laso@xxxxxx]
Sent: Friday, April 11, 2003 1:13
PM
To: Metastockusers@xxxxxxxxxxxxxxx
Subject: RE: [Metastockusers] Re:
Logarithmic Scaling/Arithmetic Scaling
<span
>
<span
>Never and I mean
NEVER, use Log Scale on INTRADAY CHARTS. It might be a VERY COSTLY mistake<font
color=black>
<span
>P.<font
color=black>
<span
>-----Original
Message-----
From: uhehs@xxxxxxxx
[mailto:uhehs@xxxxxxxx]
Sent: Friday, April 11, 2003 7:05
PM
To: Metastockusers@xxxxxxxxxxxxxxx
Subject: RE: [Metastockusers] Re:
Logarithmic Scaling/Arithmetic Scaling<span
>
<font
size=2 color="#993366" face=Arial>Sounds good, I’m going to go with Log Scaling form
now on; I use daily and 15-min charts
and only about 250 days of data.
<font
size=2 color="#993366" face=Arial>
<font
size=2 color="#993366" face=Arial>Thanks again.
<font
size=2 color="#993366" face=Arial>
<font size=2 color=black
face=Tahoma>-----Original
Message-----
From: wavemechanic [mailto:wd78@xxxxxxxxxxxx]
Sent: Friday, April 11, 2003 8:31
AM
To: Metastockusers@xxxxxxxxxxxxxxx
Subject: Re: [Metastockusers] Re:
Logarithmic Scaling/Arithmetic Scaling<span
>
<font size=3 color=black
face="Times New Roman"> <font
color=black>
<font size=3 color=black
face="Times New Roman"> <font
color=black>
<font size=2 color=black
face=Arial>-----
Original Message ----- <span
>
<font size=2 color=black
face=Arial>
From:<font size=2 color=black
face=Arial> <a
href="" title="uhehs@xxxxxxxx">uhehs@xxxxxxxx
<font size=2 color=black
face=Arial> <font
size=2 color=black face=Arial>
<font size=2 color=black
face=Arial>To:<span
> <a
href=""
title="Metastockusers@xxxxxxxxxxxxxxx">Metastockusers@xxxxxxxxxxxxxxx <font
size=2 color=black face=Arial>
<font size=2 color=black
face=Arial>Sent:<span
> Thursday, April 10,
2003 7:29 PM<span
>
<font size=2 color=black
face=Arial>Subject:<font size=2 color=black
face=Arial> RE: [Metastockusers]
Re: Logarithmic Scaling/Arithmetic Scaling<font size=2
color=black face=Arial>
<font size=3 color=black
face="Times New Roman"> <font
color=black>
<span
class=EmailStyle20>Thank you Harold.
<span
class=EmailStyle20>
<span
class=EmailStyle20>Always something simple,
isn’t it?!
<span
class=EmailStyle20>
<span
class=EmailStyle20>I read that using
Logarithmic Scaling was the best option, what do you think?
<span
class=EmailStyle20> <font
color=black>
<font
size=2 color=black face=Arial>The following is a brief discussion of
log vs linear scaling. The general consensus is that linear is OK for
short times, but then log is used. Usually the cutoff is 1 year, and the
difference below 1 year is usually quite small.<font
color=black>
<font size=3
color=black face="Times New Roman"> <font
color=black>
<font
size=3 color=black face="Times New Roman">Logarithmic (Percentage) Scaling<span
class=EmailStyle20>
<font size=2
color=black face=Arial>On a Logarithmic (Percentage) scale chart, the
vertical spacing between two points corresponds to the percentage change
between those numbers. Thus, on a log scale chart, the vertical distance
between 10 and 20 (a 100% increase) is the same as the vertical distance
between 50 and 100. Because these charts show percentage relationships,
logarithmic scaling is also called "Percentage" scaling. It is also
called "Semi-Log" scaling because only one of the axes (the vertical
one) is scaled logarithmically.
<font size=2
color=black face=Arial>The other popular scaling option is Arithmetic
scaling (AKA linear scaling). On charts with large vertical ranges, technicians
typically use log scaling because it results in a truer picture of the price
action.
<font size=2
color=black face=Arial>Logarithmic scaling compresses the vertical axis
on charts with large vertical ranges. Compare the two charts below:
<font size=3 color=black
face="Times New Roman"><img
src="png00008.png"
v:src="png00008.png" v:shapes="_x0000_Mail" width=0
height=0 class=shape >
<img border=0 width=360 height=208
src="jpg00135.jpg" v:shapes="_x0000_i1025">
Arithmetic Scaling
<font size=3 color=black
face="Times New Roman"><img
src="png00009.png"
v:src="png00009.png" v:shapes="_x0000_Mail" width=0
height=0 class=shape >
<img border=0 width=360 height=208
src="jpg00136.jpg" v:shapes="_x0000_i1026">
Logarithmic Scaling
<span
>
<font size=2
color=black face=Arial>Compare the period from 1994 to 1996 on the two
IBM charts above. On the arithmetic chart, things appears to be
a very quiet during that time period with the line increasing very gradually.
On the log scale chart things look very different - the price line rises
dramatically in the first two years. Given that the stock more than doubled
during that period, the arithmetic scale chart paints a very misleading picture
of the price action.
<font size=2
color=black face=Arial>Similarly, compare the price action during the
first half of 1999. On the arithmetic chart, this visually dramatic increase
dominates the entire chart. On the log scale chart, it is much less prominent.
During that time, the price rose from roughly 80 to roughly 140, an increase of
75%. While that kind of increase is very nice, it is misleading to have that
move visually dominate a chart that shows an overall increase of roughly 1300%.
Again, the arithmetic chart leaves an inaccurate impression.
<font size=2
color=black face=Arial>
<font size=3
color=black face="Times New Roman"> <font
color=black>
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face="Times New Roman"><br
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