Which is better: Arithmetic or Logarithmic scale charts?
A market chart has two axes, the x-axis and they-axis. Where the x-axis registers the date, the y-axis registers the price. The y-axis has two methods for plotting it: an arithmetic scale or logarithmic scale. Whichever you chose will have implications for your trading.
Arithmetic scale: On an arithmetic scaled chart, the spacing between price levels is equal. If price rises, like from 1000.20 to 1500.20 and 1780.20 to 1980.20 for gold, the grid spacing on the chart does not change. This is a gold chart illustrating arithmetic scaled chart.
Logarithmic scale: The log chart is scaled based on percent moves. A hundred percent move or change in prices will have a larger space than a fifty percent move or change in prices because the spacing reflects differences in percentages. The same gold chart illustrating a logarithmic scale.
The differences in both scales are not readily noticeable when charts are plotted on short periods of time because price fluctuations are relatively subdued. However, you begin to notice considerable differences with large price fluctuations.
Because my trading is in the short term, I use the arithmetic scale. But position traders who deal on the longer term would consider using both arithmetic and logarithmic charts for their trading. That way they see both the price level moves as well as how that scales in percentage terms.
Arithmetic scale: On an arithmetic scaled chart, the spacing between price levels is equal. If price rises, like from 1000.20 to 1500.20 and 1780.20 to 1980.20 for gold, the grid spacing on the chart does not change. This is a gold chart illustrating arithmetic scaled chart.
Logarithmic scale: The log chart is scaled based on percent moves. A hundred percent move or change in prices will have a larger space than a fifty percent move or change in prices because the spacing reflects differences in percentages. The same gold chart illustrating a logarithmic scale.
The differences in both scales are not readily noticeable when charts are plotted on short periods of time because price fluctuations are relatively subdued. However, you begin to notice considerable differences with large price fluctuations.
Because my trading is in the short term, I use the arithmetic scale. But position traders who deal on the longer term would consider using both arithmetic and logarithmic charts for their trading. That way they see both the price level moves as well as how that scales in percentage terms.
免責聲明
這些資訊和出版物並不意味著也不構成TradingView提供或認可的金融、投資、交易或其他類型的意見或建議。請在使用條款閱讀更多資訊。