Linear price scale,
Definition of Linear price scale:
The interpretation of a stock chart can vary among different traders depending on the type of price scale used when viewing the data.
A scale that is plotted on a chart so that the values have an equidistant spacing. The changes in measurement are equal on the vertical side of the chart. Traders of commodity futures typically use it in short-term trading. Opposite of logarithmic price scale.
A linear (arithmetic) price scale is a type of asset price charting scale used as by traders that is plotted with real values spaced equidistant from one another on the vertical y-axis. Each unit change is represented by the same vertical distance on the chart, regardless of what price level the asset is at when the change occurs.
How to use Linear price scale in a sentence?
- Linear price scales—also referred to as arithmetic—represent price on the y-axis using equidistant spacing between the designated prices.
- A logarithmic price scale chart, on the other hand, is plotted to show the percentage change that occurs when a price moves from one quote to the next. .
- Linear price scale charts display absolute values, which does not depict price movements in relation to their percent change.
Meaning of Linear price scale & Linear price scale Definition