Truncated axis
A chart axis that starts above zero, so only the top of the values is shown and small differences look huge.
In plain English
On a bar chart, the length of the bar is the message. Start the axis at 97 instead of 0 and a rise from 98.0 to 99.5, about 1.5%, is drawn as a bar 2.5 times taller. Line charts can zoom in if they're clearly labelled; bar charts can't.
Uncle Gary explains
Cousin Kevin's bathroom scale shows his weight on a chart starting at 196 pounds. Losing one pound looks like losing half of Kevin.
Why it matters for your money
Trading apps zoom every price chart to fill the screen, so a 2% day looks like a cliff. Read the percentage before the shape.
Where we tested it
Related terms
All glossary terms. Educational content, not financial advice.