Log vs Linear Scale
A scaling choice that completely changes how long-term charts look — and which to trust.
The price axis on a chart can be scaled two ways, and the choice dramatically changes how a long-term chart looks. On a linear scale, equal rupee moves take equal vertical space. On a logarithmic scale, equal percentage moves take equal vertical space.
For investing, percentages are what matter — a ₹10 move is enormous on a ₹50 stock and trivial on a ₹5,000 one. A log scale reflects this: it shows equal percentage changes as equal distances, so a doubling looks the same whether from ₹50→₹100 or ₹5,000→₹10,000. That’s why on long-term charts a log scale tells the honest story, while a linear scale makes recent big-number moves look explosive and squashes early growth into a flat line.
ExampleA stock that rose from ₹10 to ₹100 (10×) and then ₹100 to ₹200 (2×). On a linear chart the second move looks bigger (a 100-point rise vs a 90-point rise). On a log chart the first move correctly towers over the second — because 10× is a far greater gain than 2×, which is what an investor actually cares about.
- Use log scale — for long-term charts and any asset that has moved a lot in percentage terms; it shows true relative performance.
- Use linear scale — for short-term charts or narrow price ranges, where the distortion is negligible and absolute levels are easier to read.
Key takeawayLinear scale spaces equal rupee moves equally; log scale spaces equal percentage moves equally. For long-term charts use log — it tells the truthful, percentage-based story; linear is fine for short ranges.
FAQs
Does the scale choice change my trendlines and patterns?
It can, especially on long-term charts — a trendline that fits on a linear scale may not fit on log, and vice versa. For multi-year analysis, draw your lines on the log scale; the relationships there reflect the percentage moves that actually matter to returns.