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When to scale or not to scale. Rate this Topic:
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nichi4589
Posted : Wednesday, May 16, 2018 3:05:25 PM
Gold Customer Gold Customer

Joined: 3/6/2005
Posts: 5

Hi, I was wanting to add OBV to the volume pane and I get the message: Scale OBV by itself / Scale with volume. I don't fully understand scaling. Any help would be greatly appreciated. Thanks

 

nichi4589

Bruce_L
Posted : Wednesday, May 16, 2018 3:15:02 PM


Worden Trainer

Joined: 10/7/2004
Posts: 64,321

The scale is the values and ranges of values for a particular indicator.

In general you do not want to scale indicators together unless they are going to be using the same units (dollars, percentages, shares, etc...).

You also do not want to plot indicators together which use the same units, but won't generally have these values in the same range. For example, price is in dollars as is average true range, but price is generally going to be much larger than average true range.

What you do usually want to plot in the same scale are things which do use the same units and do have similar ranges. You actually need to do so if you want to be able to compare the indicators by clicking on them and selecting Create Condition.

Volume and On Balance Volume should not be plotted on the same scale. Volume is in shares and can be anything from zero on up. On Balance Volume is also in shares, but is a running total and thus will not usually be in the same range as volume.



-Bruce
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