Editor's Choice

Tuesday, 10 Mar 2020
< Back to Home

Anatomy Of The Fall

You are supposed to use a log scale on a share price chart if looking at charts over a long period of time. The basic explanation is that a log chart shows two equivalent percentage price changes represented by the same vertical distance on the scale and to accommodate that the distance between the numbers on the scale decreases as the price of the asset increases.

I read one article this morning talking about the ‘Historic’ coronavirus correction. This is a 100 year chart of the Dow Jones using a normal price scale. The 1929 Crash and the 1987 Crash, because they were so long ago when the index was just a few hundred points, are now considered, on this chart, irrelevant.

But if you lived through 1929 or 1987 they were not irrelevant, they were

...Continue Reading





Share this article:


 

STOCK MARKET
ADVICE

There is no other share market newsletter like it


Sign up for a 14-day trial

Start maximising your investments right now with a free 14-day Marcus Today trial.

Once you've signed up:

  1. We'll send you an email to confirm your new account

  2. Click on the link in the email to activate your account

  3. Enjoy your new 14-day Marcus Today trial