The vertical distance between 1 and 2 (a 2:1 ratio) is 1/2 in. Similarly, the 2:1 distance between 4 and 2 is also represented on the chart as 1/2 in. A specific vertical distance on the chart indicates the same percentage change in the price being measured, whatever the level. For example, if the scale was extended, 1/2 in. would always represent a doubling, from 1 to 2,16 to 32, 50 to 100, and so on, just as 1/2 in. would indicate a rise of 50 percent and 1 in. would show a qua­drupling of prices. Almost all computer software gives the user the option of choosing between arithmetic and logarithmic scales.

It is important to remember that market prices are a function of psychological attitudes toward fundamental events. Since these attitudes have a tendency to move proportionately, it makes sense to plot them on a scale that reflects proportionate moves equally.

The importance of using logarithmic scales whenever possible is the price has traced out and broken down from a rectangle. Projecting the vertical distance between 200 and 100 downward gives an objective of 0, clearly a very unlikely possibility. On the other hand, uses the same projection based on a logarithmic scale. In this case, a more realistic objective of 50 is obtained.

If the minimal objective proves to be the ultimate extension of the new trend, a substantial amount of accumulation or distribution, whichever is appropriate, will usually occur before prices can move in their original direction. Thus, if a 2-year rectangle is completed and the downward price objective is reached, even though further price erosion does not take place, it is still usually, though certainly not always, necessary for a base (accumulation) to be formed of approximately the same size as the previous distribution before a valid uptrend can take place.

In many cases, the price will move beyond the objective. In really strong moves, it will move in multiples of it, where the various multiples or the objective itself becomes an important support and resistance area.