Skip to content
GetProfitable
Search
Dictionary

Linear scale

A price axis where equal distances represent equal dollar moves regardless of the starting price.

The default on most charts. Ten dollars occupies the same vertical space whether price is at 20 or at 2,000.

Linear works fine for short windows and for instruments quoted in fixed increments, such as index futures over a single session, where percentage distortion is negligible. Traders who size positions in dollars per point often find linear more intuitive for placing stops.

The failure case is long history or large ranges. A trendline drawn across a decade on linear will be far too steep near the start and far too shallow near the end, producing false breakout signals. If price on your chart has more than roughly doubled, switch to log-scale before drawing anything.

Related: log-scale, timeframe

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

Breakout and retestPrice stalls under one level, pushes above it, comes back to touch it from above, then continues higher.pricetimeold resistancenow support1price keeps stalling2breaks above3pulls back and retests it4and carries on
Breakout and retest. Price stalls under the same level several times, pushes above it, then drops back to touch it from above before carrying on. That touch is the retest, where the old ceiling is tried as a floor. A break that falls straight back under it is a false breakout.

Educational only, not advice. Spotted an error? Post in Site Feedback.