Taiwan

When to use a log scale or an arithmetic scale? I get asked this. After wave 3 appears complete if the pace of advance keeps slowing down that trendlines keep breaking on a log scale, meaning visually you see prices rounding towards the right-hand side, then maybe an arithmetic scale can fit better. From 2009-2016 I used an arithmetic scale for US stock indices too for this reason and the channel fit very well for that time period. Here Taiwan stocks are crashing this morning from the top end of a channel in wave 4 down. Wave IV of 3 was a triangle so it was clear the final leg up started. Now that it has ended this scale appears to work best. prices may consolidate till they reach the lower channel line or the region near the wave IV triangle near 16000. Since wave 2 was a flat wave 4 can be a zig-zag too, rare for that to happen though. The alternate would be an expanded flat. Lets see its early to say what the structure is but it wont be a sideways pattern like wave 2.