Vitas: could you please try to explain differences in trendlines
on log versus semi-log charts? Have you found one to be more significant than the other?
Well for those that don't know, a semi-log chart scales price action in a percentage perspective. So over time on the chart a 20 to 40 dollar move in a stock ten years ago looks the same on the chart as a recent 200 to 400 dollar move. Both equally dynamic moves of 100%. (Of course, with some internet stocks that would be over a matter of months...maybe days...<g>)
I have found semi-log scaled charts give better results for me, especially for longer-term analysis. (I really have no statistics to back that opinion up, just a few years of experience using both semi and linear.) However, for shorter-term trend lines (intraday) often there is not a lot of difference, unless the stock or indices is experiencing major movement on a percentage basis. And, there is no difference when looking at price action areas, such as support or resistance at a previous high or low, etc.
So, if you are charting trend lines on a semi-log chart verses a linear chart you can and often will get different results.
As in most TA it is what works for you...and I sometimes forget when communicating to others about price movement around trend lines, above/below or holding resistance/support, that most do not use semi-log scale. Thanks for reminding me...<g>
Regards,
LG |
