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Strategies & Market Trends : Technical Analysis- Indicators & Systems

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To: Bill Sandusky who wrote (2317)	8/2/1997 4:11:00 PM
From: GW Riedeman	of 3325

Bill...Regression is a linear function and plots on linear plots -- so many dollars in so many periods. If you were to take the LOG of the $$$ vs periods, and plot on a LINEAR plot, it would be the same as plotting $$$ vs periods on a semilog plot. A straight line on a SEMILOG plot indicates constant compounded interest per period. For examplel, a 10% increase in 100 periods for a $10 stock gives the same slope line as a 10% increase in 100 periods for a $100 stock. This is not true for a LINEAR plot; the slope at $100 is much steeper than the slope at $10. I cover this subject in my TAINJ part of the journal. Also, I don't think WoW will let you plot regression lines on a semilog plot. I suspect other programs will have similar limitations. I hope this answers your question.... Bill

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