Trends/Trendlines and channels

Log-scale trendline

A trendline drawn on a percent scale, where equal percent moves look equal. On a normal scale the same line is curved.

Trendlines and channelsBest on 3Y, 5Y, 10YAlso called semi-log trendline, percent trendline

Illustration of the log-scale trendline shape. It is a sketch, not real price data.

What it shows

On a normal (linear) chart, equal price steps look equal. On a log chart, equal percent steps look equal, so a stock that doubles looks the same at 5 to 10 as at 50 to 100.

A trendline that is straight on a log chart is curved on a linear chart. For long periods, 3 years and more, price can rise by a large factor, and a straight line on the linear chart would miss the early part completely. That is why we draw long-period lines on the log scale.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Convert prices to their natural logarithm.
Find swing lows (or highs) in the log values.
Fit and test the trendline on the log values.
Convert the line back to prices to plot it on the chart.

Starting values: Used for 3Y, 5Y, 10Y; Scale shown log price axis. These are proposed and will be tuned on real price data before launch.

How to read it

The blue curve is the log-scale line drawn on a linear axis.
The dashed straight line is the same two anchor points joined on a linear axis. It drifts away from price.
On a log axis the blue curve becomes straight.

Status labels you may see

Label	What it means
Above the line	The last close is above the line.
Testing the line	Within 2% of the line.
Below the line	Under the line.

What cancels it

A close below the line (for a rising line) or above it (for a falling line).

What traders check next

Whether the line looks reasonable on both axes.
The percent growth rate per year that the slope represents.
Whether a shorter period gives a very different slope.

Limits

It only matters when the move is large. For short periods the two look the same.
Log charts make large moves look smaller than they feel.
Some free charts default to linear, which can confuse comparisons.

Try it in forecastviz

Open any ticker and choose Trendlines and channels → Log-scale trendline in the left menu.
Switch between 3Y, 5Y, 10Y to see how the picture changes.
Compare with Uptrend line and Ascending channel on the same chart.

Open on a ticker

Questions

Why not always use log?

For short periods the difference is tiny and the linear chart is simpler to read.

How do I switch scales?

Our long period views use log automatically. Short period views use linear.