Direct answer
In forex charting, “linear” and “logarithmic” describe how the y-axis (price scale) converts numbers into distances on the screen. A linear scale uses equal steps for equal absolute price changes, while a logarithmic scale uses equal steps for equal relative changes (typically percentages). The market data itself is the same; the scale changes what looks “bigger” or “smaller” when you compare moves across different price levels.
Mechanics: what the two scales do
Linear scale
A linear price chart assumes a direct mapping between price values and vertical height. In practice, when the price goes up by the same absolute amount (for example, +10 in price units), the vertical distance on the chart is the same, no matter whether that +10 happens near the top or near the bottom of the chart window.
This is useful when you care about absolute movement and when comparing moves of the same size in price units.
Logarithmic (log) scale
A logarithmic price chart compresses or expands the vertical axis so that equal relative changes look equally sized. In the simplest interpretation, it means equal percentage moves (or equal ratios) correspond to equal vertical distances.
So, a move from 50 to 55 (+10%) and a move from 100 to 110 (+10%) would appear with the same vertical distance on a log-scaled chart, even though the absolute price change differs.
Key inputs and outputs
- Input: the y-axis value (price) that your charting tool plots.
- Input (for log interpretation): the mapping is based on logarithms of the price level, so the chart’s visual geometry depends on the plotted range.
- Output: the vertical position of each price relative to the axis.
Because both scales are “rendering” choices, they affect visual interpretation (how steep a move looks, how distances compare). They do not change the underlying sequence of prices coming from the feed you use.
Evidence and example: comparing how the same moves look
Below is a numeric thought experiment. Assume two different price ranges and compare the same relative move.
Example A: equal absolute move
- Scenario 1: price moves from 1.2000 to 1.2010 (absolute +0.0010)
- Scenario 2: price moves from 1.5000 to 1.5010 (absolute +0.0010)
On a linear chart, both moves use the same absolute increment, so both should map to the same vertical distance.
On a log chart, the higher price level corresponds to a different relative size for the same absolute increment. Because 0.0010 is a smaller percentage at 1.5000 than it is at 1.2000, the higher-level move would typically appear smaller vertically.
Example B: equal percentage move
- Scenario 1: price moves from 1.2000 to 1.2120 (+1% relative)
- Scenario 2: price moves from 1.5000 to 1.5150 (+1% relative)
On a logarithmic chart, equal relative change is designed to look like equal vertical distance, so both would typically appear similarly sized.
On a linear chart, the absolute change is larger in scenario 2 (+0.0150) than in scenario 1 (+0.0120). Therefore, the second move would typically appear larger vertically.
What you can and cannot infer
- You can infer how steepness and distances are visually represented.
- You should not infer “strength” or “likelihood” of a future move just from the visual steepness, because steepness is affected by the chosen scale.
Limitations and risks: where log vs linear can mislead
1) Visual interpretation changes, so your comparisons may change
If you compare the steepness of two trends that occur at very different price levels, linear and log scales can tell different visual stories. This is not a flaw in the data—it is a mismatch between what you think “equal distance” means.
2) Reference and chosen window matter
Logarithmic scaling depends on the plotted range and on how the charting tool handles the transformation across that range. Changing the visible window (zooming in/out) can change how much compression/expansion you see, which can affect your read of distances and trend angle.
3) Absolute vs relative “meaning” must be consistent
If your analysis is based on absolute changes (for example, “price moved by X pips”), using a log chart can make comparisons less direct. If your analysis is based on relative changes (for example, “moves of Y percent”), a linear chart can make those comparisons less direct.
4) Failure mode: using log settings with incompatible assumptions
A common failure mode is treating a log-scaled chart as if it preserved absolute distances. For instance, drawing conclusions from “the same vertical rise equals the same absolute movement” will be wrong on a log scale.
5) Historical relationships do not guarantee future outcomes
Even when the visual representation improves your ability to compare moves, that does not establish that similar patterns will occur again. Market dynamics can change, and any past relationship you notice should be treated as an observation, not an expectation.
Verification and next question
To verify your understanding independently:
- Pick a charting tool that offers both linear and log scales.
- Use the same instrument and the same visible time window.
- Switch between linear and log and observe how equal absolute moves versus equal percentage moves change in apparent size.
Next, decide which interpretation matches your purpose: comparing equal absolute changes (linear) or comparing equal relative changes (log). If you tell me what charting platform or interface you’re using, I can describe where you typically find the scale toggle and what to observe when you switch it—without assuming any specific trading outcome.