Logarithmic Price Scale

A logarithmic (log) price scale plots price changes by percentage rather than by absolute dollar amounts. On a log scale, equal percentage moves occupy equal vertical distance, which makes large multi‑year gains or losses easier to interpret visually.

Key takeaways

• Log scales represent equal percentage changes with equal vertical spacing.
• They’re useful for long‑term charts and volatile assets because they reflect relative moves.
• Linear scales show equal dollar increments and can understate large percentage moves at higher prices.
• Use log scale to compare trend strength over multiple price ranges; use linear when absolute dollar distance matters.

What a log scale shows

On a log price scale, the spacing between tick marks compresses as price increases. For example:
* The vertical distance between $10 and $20 equals the distance between $20 and $40 (both are 100% moves).
* The distance between $100 and $120 is much smaller because that is only a 20% move.

This makes large percentage moves visually prominent regardless of the asset’s price level.

How it differs from a linear scale

• Linear scale: equal vertical spacing represents equal dollar changes (e.g., each $10 step is the same distance).
• Logarithmic scale: equal vertical spacing represents equal percentage changes (e.g., each 100% step is the same distance).

Because linear charts treat each dollar the same regardless of price level, they can minimize the visual impact of significant percentage moves at higher prices. Log charts avoid that distortion.

When to use each scale

Use a logarithmic scale when:
* Analyzing long-term price trends spanning wide price ranges.
* Comparing trends where percentage performance is the meaningful metric.
* Working with highly volatile or rapidly appreciating assets.

Use a linear scale when:
* You care about absolute dollar changes (e.g., fixed price targets or margins).
* Examining short-term movements where price range is narrow.
* You want to measure exact dollar distance between levels.

Practical tips

• Many charting platforms default to log scale for longer timeframes; check your chart settings.
• For trendlines and channel analysis over long periods, log scale gives a more consistent view of trend slope.
• When presenting results, state which scale you used—interpretation differs between log and linear.
• Switch between scales if uncertain: large differences in appearance signal whether percentage or absolute change is driving the pattern.

Summary

Logarithmic price scales emphasize percentage moves and provide a clearer view of long-term trends and large price swings. Linear scales emphasize absolute dollar changes and can be useful for short-term targets or when dollar distance matters. Choose the scale that matches the question you’re trying to answer.