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Log Vs Linear TradingAsk a hundred traders whether you should be using Log charts or Linear charts and you will get as many answers. The real answer seems to boil down to - Look at both and find what works. On the lower time frames there is often not a big difference. Log is often considered best for longer-term charting, but that is not an absolute. Badrosha on twitter writes: twitter.com You can test the difference between Linear and Log for yourself. Try these ideas to see if you notice any differences: ->First, use " Magnet Mode " (symbol of a magnet on low left of options on left side of your chart) and pick your two points of a trend using a "Ray" (continuous line). On magnet mode the ray will stick to the top of a candle body or wick for you. >Second, start to shuffle between the log and linear to find the story they are telling. -LOG charts are generally considered to be better in a parabolic rally. -Linear is often considered best for ENTRIES because it can potentially show Down Trend breakouts, short swing trade set ups, and pattern breakouts before the log chart will. -Log is often considered best for EXITS and long term charting. Log shows - Up Trend breakouts, long swing expiration, or short entries sooner than linear. >With Linear you can see classic entries on breakouts, which is the confirmation on a broken trend. While with log, you rarely find a good one - if price action starts to return on a breakout the percentage change (log) will can give false signals - unless in "parabola." The bottom line: there is not a "right" answer. What matters is if it works, not whether one is right philosophically or intellectually. Look at the history of a chart and look at what has worked, because one of the tenants of Technical Analysis is "History Repeats Itself." On the daily chart of BTC 0.00% right now, there is a potentially important difference between Log and Linear charts. Follow the instructions above for Magnet mode and a Ray and switch between Log and Linear. Also shown in the charts here. This difference is why a lot of traders disagree right now on whether we are in a continuation of the bearish trend , or the start of a new, potentially bullish , trend. Ari-Wald, C.F.A, C.M.T Analyst Wolfe Research @AriWald For me, I’m a Log-always analyst. While the differences are many times negligible, there are times that Log scaling provides a considerably stronger view of the stock’s trend vs. Arithmetic scaling, but I’ve never found the opposite to be true. The advantage of Log is clearly seen at long-term horizons or during big price moves at lower prices. As an extreme example, drawing a trendline on an arithmetic chart of the S&P 500 0.05% from 1930-current is not an accurate depiction of the index’s trend during that period in my view. We realize that a 10 point move from 20 to 30 (50%) is not the same as a 10 point move from 30 to 40 (33%). A line on a log chart would look like a curve plotted on an arithmetic scale in this example – but consider that the price on this arithmetic scale gives an inaccurate view of price, in my opinion, and therefore the curved trendline is justified. So overall, if I’m going to use a Log chart in this situation I should maintain my defaults on Log because I won’t encounter a time when I’m at a disadvantage, only times when Log is preferred. Pete-L-Brandt – C.E.O. 2 Factor LLC @PeterLBrandt As a trader I do not use log charts. However, I can see some advantages to log charts for analysts who exam very very long-term trends. The reason I do not use log charts is that they are irrelevant to me as a futures trader. The value of a $15 move in the S&P 0.05% was the same to me when S&Ps traded $150 as it is today when the S&Ps are at 1700 or so, even though on a percentage basis the $15 change was 10% of the price in 1983 and less than 1% of the index today.
BITFINEX:BTCUSDEducation
by Nevermorejk
1
Log vs Linear Crypto Trading Ask a hundred traders whether you should be using Log charts or Linear charts and you will get as many answers. The real answer seems to boil down to - Look at both and find what works. On the lower time frames there is often not a big difference. Log is often considered best for longer-term charting, but that is not an absolute. @Badrosha on twitter writes: twitter.com You can test the difference between Linear and Log for yourself. Try these ideas to see if you notice any differences: ->First, you got to use " Magnet Mode " (symbol of a magnet on low left of options on left side of your chart) picking your two or three points of a trend using a " Ray" (a straight line). On magnet mode the line will go to the top of a candle body or wick for you. >Second, start to shuffle between the log and linear to find the story they are telling. -LOG charts are generally considered to be better in a parabolic rally. It will be easier to see whether its Bullish or Bearish -Linear is often considered best for ENTRIES because it can potentially show Down Trend breakouts, short swing trade set ups, and pattern breakouts before the log chart will. -Log is often considered best EXITs and long term charting. Log shows Up Trend breakouts, long swing expiration = short entry, higher and prior to linear. >With Linear you can see classic entries in breakouts, which is the confirmation on a broken trend. While with log, you rarely find one and actually if price action starts to return on a breakout, the breakout will likely invalidate and go deeper - unless in "parabola." The bottom line: there is not a "right" answer. What matters is not whether one is right philosophically or intellectually, it matters what Works. Look at the history of a chart and look at what has worked, because one of the tenants of Technical Analysis is "History Repeats Itself." On the daily chart of BTC right now, there is a potentially important difference between Log and Linear charts. The red resistance is the Log resistance for the current bearish trend, while the blue resistance is the linear resistance for the current bearish trend. This difference is why a lot of traders disagree right now on whether we are in a continuation of the bearish trend, or the start of a new, potentially bullish, trend. Ari Wald, CFA, CMT Analyst Wolfe Research @AriWald For me, I’m a Log-always analyst. While the differences are many times negligible, there are times that Log scaling provides a considerably stronger view of the stock’s trend vs. Arithmetic scaling, but I’ve never found the opposite to be true. The advantage of Log is clearly seen at long-term horizons or during big price moves at lower prices. As an extreme example, drawing a trendline on an arithmetic chart of the S&P 500 from 1930-current is not an accurate depiction of the index’s trend during that period in my view. We realize that a 10 point move from 20 to 30 (50%) is not the same as a 10 point move from 30 to 40 (33%). A line on a log chart would look like a curve plotted on an arithmetic scale in this example – but consider that the price on this arithmetic scale gives an inaccurate view of price, in my opinion, and therefore the curved trendline is justified. So overall, if I’m going to use a Log chart in this situation I should maintain my defaults on Log because I won’t encounter a time when I’m at a disadvantage, only times when Log is preferred. Peter L Brandt – CEO Factor LLC @PeterLBrandt As a trader I do not use log charts. However, I can see some advantages to log charts for analysts who exam very very long-term trends. The reason I do not use log charts is that they are irrelevant to me as a futures trader. The value of a $15 move in the S&P was the same to me when S&Ps traded $150 as it is today when the S&Ps are at 1700 or so, even though on a percentage basis the $15 change was 10% of the price in 1983 and less than 1% of the index today.
BITFINEX:BTCUSDEducation
by Nevermorejk
1
Perspective on Bitcoin -> Logarithmic & Linear ScaleHello dear friends! I hope you are doing well. I've been laying sick in my bed for most of the week, so you haven't seen much TA from me lately. I'm starting to get back on my feet again, so let's kick off with a dual chart on Bitcoin / US dollar. This Bitcoin chart is all about perspective. The chart on the right is using the linear price scale, to which most of us default in our daily trading. The chart on the left is using the log, short for logarithmic, scale. For those who might be unfamiliar with the log scale, here is the definition from Investopedia: A type of scale used on a chart that is plotted in such a way that two equivalent percent changes are represented by the same vertical distance on the scale, regardless of what the price of the asset is when the change occurs. Some of us might be saddened or pessimistic about Bitcoin / the cryptocurrency market right now. This is very understandable, especially if we look at the lineair price scale. Bitcoin went down to $5,800 in February, coming from nearly $20,000 in December. Right now, shorter term, the market is bearish and Bitcoin's volatility is dominating trends of alt coins. However if we zoom out and look at the bigger picture it seems less wrecked as it might appear. In November / December 2017, Bitcoin rocketed to the moon, hype and fomo fueled rocket engines make it break orbit from the yellow channel on the log scale chart, but... it couldn't escape its gravity and when the hype fuel burned up it got pulled right back in to the channel. We could and should probably call it a crash, also considering how it influenced the market as a whole, but it still acts within the yellow ascending channel, while it could also have crashed through that bottom by now if the market would have crashed beyond repair or hope for salvation. This chart is for reflection purposes, I hope it might help those of you in need for fresh perspective. I will soon post an updated zoomed in BTC chart with my short term price expectations. Personally I only enter trades after I witness a break confirmation. My analysis is not financial advice: you should never invest solely upon reading my or another persons TA and do your own research: explore news, social media, tech info and so on. Monitor your investment and set alerts and stop loss orders in place. If you like my charts an upvote/like is much appreciated. Happy Trading! ~ CryptoJC
COINBASE:BTCUSD
by CryptoJC
13
Random Trader - enter randomly long or short This script implements a linear congruental generator and gives us a pesudo random number between 1 and zwro. This script provides the basis for statistical modeling of results versus random results which can be very useful for statistical studies or for testing backtested results. This script was useful in the development of LOLA which is trading silver with real money and real results. Please enjoy. This language lacks a random number function so here you have it. Peace. Tarzan
COMEX:SI1!
by tarzan
1
BTSBTC 594 days long fight against a linear regression downtrendThe +2 deviation line was touched but shortly left unbowed. A quick observation of a market timing advises that a positively solved btc debacle might have some bearing on this scenario, notwithstanding, one thing remains static no matter what plot develops around in the btc chart. It's location of the 89 timezone. Being a predefined invariable, it sits tight in the future that is yet to come, waiting for the bulls to outbalance the bear thrust in this 594 d declining regression trend. Ideally, uncertainty coupled with flames of passion flaring up in the btc subreddit would solve all the problems here, and 89 timezone sets a key turning point in this story giving the market 30 days to make it out of an established regression downtrend. In the worst case scenario with sellers jumping the shark again it would get dimmed to dull embers though its deemed normality to get slapped one last time before a new uptrend sets in. The narrower the trading range is, the more problems there are with keeping it in the same tight room. Pay attention to time, if a green support zone gets pierced through before 05.03 +/- week bts could lose up to 95% of its present value.
Long
by heglassedme
1
Bat Pattern, Eur/Aud, 1 hrHere we have a completed Gartley pattern in the positive deviation area of the last 100 and 200 moves. According to my strategy , this market is likely to reverse down into the negative regression. As of right now, the market is retesting the high at point D and we should see a trade completion in the next couple of hours. Anyone that has been following my trades knows that last week I had a very bad week and I am making a minor change to my strategy for the week , until we recover from our losses, i was previously trading all harmonics to the 1.618 extension of the BC leg, but as of this week , i will only be trading harmonics to the .618 extension , just for a guaranteed close for profit. I have placed my trade actions as follows: Limit: point X Entry: point D Limit: the .618 extension of the BC leg Please like and comment if you agree or disagree respectively. And always follow me for more updates on market analysis and harmonic patterns , and recently a lot of wave theory's. And as always Good Trading Everyone!
Short
by Kylan_Laymance
Bat Pattern, Aud/Nzd , 1hrHere I found a bat pattern developed and completed in the negative deviation range of the AUD NZD chart. my strategy suggests that the market will rally up into positive deviation before correcting for trend continuation. I have place my entry at point B to Verify reversal after point D I have placed my Stop at point X for the break below close below bust ! have placed my limit at the 1.618 extension of the BC leg , for consistency and risk reward ratios
Long
by Kylan_Laymance
Gartley Pattern, Gbp/Jpy, 15minherre we see a fairly solid gartley pattern on the gbp jpy charts. like all gartley patterns , I expect the market to complete the patteren , and then continure to rally to the 1.618 extension of th BC leg. I have support form the linear regression channel, which suggests that the market is low, and should rally back up into the positive deviation. I have places my entry at point B , my stop at point X and my limit at the 1.618 extension of the BC leg. Thanks for checking this out, dont forget to like comment and follow for more Forex updates. As always Good trading !
Long
by Kylan_Laymance
Bat Pattern, Cad/Jpy, 30 minHere we see a bat pattern forming in the Cad/ Jpy charts, it is likely that the pattern will complete, because it seems too close to the linear regression line to try to recross without some lower moves. once the pattern completes the market will likely reverse upon completion and rally back across the regression line reaching the 1.618 extension of BC. (this may take as long as 9 hours) Our actions are as so: Limit: 100.089 Entry: 99.939 Stop:99.869 Please follow along to see how this trade goes, for updates and more trades , follow me here on TradingView and don't forget to like and comment your opinions. Thanks for checking this out ! as always Good Trading !
Long
by Kylan_Laymance
Cypher Pattern , Usd/Chf, 15minHere we see a cypher pattern on the Us Swiss charts. This pattern is indicating that the market will reverse upon completion, and is supported by completing above the linear regression line. When a Bearish pattern completes above the standard deviation line, it is likely that , If the market is bearish, the market will rally back under the line , and similar to a price action trade, come near the negative deviation line. I have forecast the market to touch the negative deviation line , which comes out to about 4 hours from now, but it is more likely to take longer and not actually reach the deviation line, but rather just cross the linear regression taking 2 days and 7 hours. With that said, i have placed my usual actions as the following: Entry: point B Limit : 1.618 extension of the BC leg Stop: point X Thanks for checking this out, look forward to you comments and likes, as always follow for my predictions! Thanks and Good Trading!
Short
by Kylan_Laymance
Butterfly Pattern, NZD/USD, 1hrHere we see a butterfly pattern on the New Zealand , United States charts. I have given the market some space to complete the end of the butterfly pattern before continuing in a bearish trend, because the closer to perfect the pattern is , the more secure of a pattern it will be. I have placed all of my order actions in the usual places, with one exception. because the pattern has not completed, I have placed my stop at the previous structure above point X. I believe that the market will possibly rally to that structure and reverse from there. Following the reversal, I will trail my stop down to point X and hold there for retracement. Please comment any idea , opinions , suggestions, changes, it helps me become a better trader. also like and follow me if you think i am on the right track. As always thanks for checking me out, and Good Trading!
Short
by Kylan_Laymance
Butterfly Pattern, Eur/Gbp, 15minHere we see a butterfly pattern on the Euro, Pound charts. Like most trades i make, i try to find support inside the linear regression channel and here we see the patern complete along the linear regression and the butterfly would suggest that we rally back up into, if not past, the positive standard deviation line. I have placed my targets like any other harmonic you will see me trade. My entry is at point b , my stop at point X and my limit at the 1.618 extension of the BC leg. This pattern appears to have 9 hours to complete as labeled by my forecast line. Thanks for checking us out, as always like comment and follow. Thank you and good trading !
Long
by Kylan_Laymance
Price Action (Elliot Wave Maybe?) GBP/JPY, 30minHere I see a price action trade along the linear regression line with standard deviation set at 2 and -2. I also believe this may be an Elliot wave cycle. If i remember correctly, the third wave, should be about the same length as the first wave, so i have placed my limit at the 1.618 extension of the second wave, just to be safe (remember, still learning price action). I have placed my stop at previous structure and my entry is at current price, with any luck, we should see some profit here in a few hours. Thanks for checking us out, any pointers would be greatly appreciated, just leave them in the comments. Don't forget to like if you agree with the trade, and follow if you want to see some more trading As always, Good trading! I
Long
by Kylan_Laymance