Linear Price Scale
 |
Definition of 'Linear Price Scale'A type of scale used on a chart that is plotted in such a way that the values on the scale are spaced equidistantly. 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. This price scale is mainly used in short-term trading, and it is often used by traders of commodity futures. Contrast this to "logarithmic price scale". |
 |
Investopedia explains 'Linear Price Scale'A linear price scale is easy to identify because it is evenly spaced up the side of the chart. For example, a linear scale disregards the fact that a $5 move is more substantial when the price of an asset is $10 than when the price of the asset is $50. The price movement that is plotted on the chart is represented as being the same distance on the scale, even though the earlier $5 increase is equal to a 50% increase, while the latter is only a 10% increase. |
Related Definitions
Articles Of Interest
-
An Introduction To J-Charting
Learn about a technical tool that's based on the view that markets are energetic systems. -
Charting Your Way To Better Returns
Learn about the powerful hybrid techniques that take advantage of both technical and fundamental analysis. -
What is the difference between a logarithmic price scale and a linear one?
The interpretation of a stock chart can vary among different traders depending on the type of price scale used when viewing the data. As this question suggests, the two most common types of price ... -
Market Summary for May 24 2013
The major U.S. indices moved lower this week, ahead of the long Memorial Day weekend. After reaching all-time highs last week, many traders attributed the sell-off to a combination of profit ... -
What Type Of Trader Are You?
There are different ways stock traders attempt to profit from market movements. Which of the strategies do you use? -
Strong Volume Gainers, Can It Continue?
Volume is one of those indicators that gets overlooked, likely because it's shown by default on almost every chart, making it a little dull. But volume is what drives markets. Big volume jumps ... -
Market Summary For May 17, 2013
The U.S. stock markets moved sharply higher this week, on track for its fourth straight week of gains, driven by ongoing improvements in economic indicators. -
Parabolic SAR Buy Signals
The Parabolic SAR indicator is flashing "buy" in these four diverse stocks. Not simply relying on one indicator though, I take a look at the overall technical outlook and determine which ones ... -
Market Summary for May 10 2013
Major U.S. indices moved higher this week but, given the new highs, traders should watch for retracements next week. -
Uncovering Oil And Gas Futures
Find out how to stay on top of data reports that could cause volatility in oil and gas markets.
Free Annual Reports
