Email of the day (4)
Comment of the Day

September 26 2011

Commentary by Eoin Treacy

Email of the day (4)

on relative charts versus overlays:
"Please see attached chart with overlay. I'm not a qualified tactician and exposing my naiveté. Looking at this chart and focusing on the month of September, it appears that both contracts have fallen similarly. But this isn't the case as the AUD/USD fell from 1.08 to .97 (an approximate 10% decline) while silver fell from 43 to 30 (30% decline).

"I realize I've been using the overlay function wrongly and should've been using the ratio. Would it be possible to place this suggestion in the wish list?

"When using overlay, allow a switch to use a percentage axis as in sample3.png attachment.

"Thank you for your consideration and your dedicated service which is highly appreciated."

Eoin Treacy's view Thank you for this insightful email. Your modesty becomes you. This is an issue more than one subscriber has raised in the past. Overlay charts are useful for a comparison in terms of timing. They depict when one market peaked or bottomed compared to another. If you wish to create a percentage change view of an overlay you can tick the 'Log Scale' box which will result in this chart.

Relative charts are more appropriate for performance comparisons since they depict how much one instrument has moved compared to another. This can be seen via a ratio or a chart which rebases the instruments to a common starting point. The Chart Library currently has the capability to perform the first operation but not the second. This development is in the top three of our wish list for developments for the Chart Library.

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