Logarithmic Chart

On a logarithmic, or log, scale, the distance from 10 to 20 equals the distance from 100 to 200, because both are a doubling. On a long chart of a stock that has risen many times, an arithmetic scale makes the early years look flat and the latest year look vertical. The log scale keeps percent moves comparable.

Trendlines on a log chart connect constant growth rates. A straight line means a steady compound pace. The same points on a linear chart curve upward even when the growth rate is constant.

The vertical axis labels bunch up as prices rise: 10, 20, 40, 80 rather than 10, 20, 30, 40. A setting named "log," "percent," or "ratio" turns it on.

Prefer log for multi-year charts, for comparing a large move with an older one, and for trendlines on a compounding price. Intraday, where the percent range is small, linear and log look almost the same.

Using a log trendline as a precise rupee target without reading it back onto the price. Also mixing a log trendline with an arithmetic one and treating a break of either as the same event.

Log scales cannot plot zero or negative prices. Percent tools are a poor fit for a price that has collapsed toward zero, where small rupee moves are huge percentages.