Posted by emilubailes on 24th of Aug 2009 at 09:44 am
I'm trying to get my head around technical analysis. To
those of you who have the experience and expertise....
How do you determine whether to look at patterns and trend lines
on the log chart or the arithmetic charts?
For instance, I follow my former employer (and trade it heavily)
- Abbott (ABT.) It has been in a downtrend for months.
If I view this trend line on a log chart, it has already broken
above the line. If I look at the arithmetic chart, it is just
trying to now.
Is there a standard rule about using one or the other when doing
TA?
Posted by padraigm on 24th of Aug 2009 at 10:11 am
I use log scale to look at charts that have broad price ranges
over long time frames.
ABT will be just fine using arithmetic IMHO. Others might have
different opinions. Over time and many many charts you develop a
comfort level - time frame indicators etc. I use the same
indicators on all my charts and then look a the stock in many
different time frames. Look at a ten year weekly of ABT then a 3
year weekly then a 3 year daily then a one year daily and so on to
5 or 15 min charts. Find the time periods you feel most comfortable
with. ABT has lot history so you could use it hone your TA
skills.
Good Luck,
Pat
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Posted by emilubailes on 24th of Aug 2009 at 09:44 am
I'm trying to get my head around technical analysis. To those of you who have the experience and expertise....
How do you determine whether to look at patterns and trend lines on the log chart or the arithmetic charts?
For instance, I follow my former employer (and trade it heavily) - Abbott (ABT.) It has been in a downtrend for months. If I view this trend line on a log chart, it has already broken above the line. If I look at the arithmetic chart, it is just trying to now.
Is there a standard rule about using one or the other when doing TA?
Thanks in advance.
Emilu
I found this helpful. http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:trend_lines
Posted by beta on 24th of Aug 2009 at 10:15 am
I found this helpful.
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:trend_lines
I use log scale to
Posted by padraigm on 24th of Aug 2009 at 10:11 am
I use log scale to look at charts that have broad price ranges over long time frames.
ABT will be just fine using arithmetic IMHO. Others might have different opinions. Over time and many many charts you develop a comfort level - time frame indicators etc. I use the same indicators on all my charts and then look a the stock in many different time frames. Look at a ten year weekly of ABT then a 3 year weekly then a 3 year daily then a one year daily and so on to 5 or 15 min charts. Find the time periods you feel most comfortable with. ABT has lot history so you could use it hone your TA skills.
Good Luck,
Pat