Arithmetic (linear) price scale
Definition
A logarithmic price scale chart is plotted to show the percentage change that occurs when a price moves from one quote to the next. They chart the price’s percentage move by mathematically portraying it in the vertical movement.
If a price increases by 1%, its higher vertical movement will be much less than a vertical movement depicting the price change of a 50% increase. To allow for mathematically scaled price movements per unit change, advanced charting software creates a non-static y-axis. In a logarithmic price scale, the y-axis changes its scale with each price movement.
