Ask Colin

What is the main reason for using semi-log charts rather than linear charts?

I used semi-log scaling on most of the charts because I was looking at the big picture on weekly and monthly charts. In most cases there was a big price change in percentage terms over the period of the chart. For these types of stocks it is important to use semi-log scaling to keep perspective in terms of percentage change in price.

For me semi-log charts are "normal" charts. This is because my time frame for trade identification is weekly charts and I am looking for big moves.

One of the best discussions of this is in Edwards and magee Technical Analysis of Stock Trends Chapter 2. See also the excellent discussion in Pring Technical Analysis Explained page 58ff.

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