Does anyone use logarithmic charts when trading? If so, what advantage to use see with logarithmic charts? I always see the setting & never could figure out why I would want to use it.
Actually (even if it says it) it is actually semi-log. Price can be set to log, time can't. Some of my software has the selection, some don't. Though I've never found any edge in using it trading - though long term economical data it can be somewhat helpful.
Whether you use is neither here nor there. It imo is only useful if you are looking at long term views on a chart. For example, if you are looking at a long term chart in Linear view and it appears the chart is topping due to parabolic moves, go to Log view and it'll give a more accurate and different perspective. The sloping trend lines too will differ. Log charts is the more accurate perspective.
This question reminds me of a line from the Hunt for Red October about launching ICBMs horizontally. You can, but why would you want to? The same answer applies to using log charts for trading.
Over a (long) period of time, linear bars are represented as price length while Log charts bars are represented in percentage. Linear chart, looks like price is accelerating when it isn't. Bar lengths appear to be increasing (but they're actually not in percentage terms) Here in Log view, bar lengths look equal from 2005 and price rise trend is not acceleating parabolically.
%% I have used both, same data; different pictures. But in Micky's example$ i tend to avoid the one that cuts out #50, too little data for me[ Delayed edit both use %, so no %problem there on both ]
not so much for charts but handles compounding/growth rates out of the box and makes comparing std dev moves easier