what is a logarithmic price scale 
a logarithmic price scale also referred to as a log scale is a type of scale used on a chart that is plotted such that two equivalent price changes are represented by the same vertical distance on the scale understanding logarithmic price scalesthe distance between the numbers on the logarithmic price scale decreases as the price of the asset increases after all a 1 00 increase in price becomes less influential as the price moves higher since it corresponds to less of a percentage change the alternative to a logarithmic price scale is known as a linear price scale logarithmic price scales are generally accepted as the default setting for most charting services and they re used by the majority of technical analysts and traders common percent changes are represented by an equal spacing between the numbers in the scale for example the distance between 10 and 20 is equal to the distance between 20 and 40 because both scenarios represent a 100 increase in price these charts differ from those using linear price scales which look at dollars instead of percentage points on those charts the prices on the y axis are equally spaced rather than becoming increasingly condensed as the asset price moves higher logarithmic price scales tend to show less severe price increases or decreases than linear price scales for example if an asset price has collapsed from 100 00 to 10 00 the distance between each dollar would be very small on a linear price scale making it impossible to see a big move from 15 00 to 10 00 logarithmic price scales solve these problems by adjusting the prices based on the percent change in other words a significant percentage move will always correspond with a significant visual move on logarithmic price scales linear price scales can be helpful when you re analyzing assets that aren t as volatile since they can help you visualize how far the price must move to reach a buy or sell target however it s usually a good idea to view linear charts on a large screen to ensure that all of the prices are viewable logarithmic price scale examplethe following chart shows an example of a logarithmic price scale for the nvidia corp nvda image by sabrina jiang investopedia 2021in the above chart you can see that the space between 20 00 and 40 00 is much wider than the space between 100 00 and 120 00 despite the absolute difference being 20 00 in both cases this is because the difference between 20 00 and 40 00 is 100 while the difference between 100 00 and 120 00 is just 20 