Histograms

Histograms are very useful charts which are used to display the number of occurrences (or the frequency) of different elements in a series of numbers. The chart to the left is a typical chart which is output from our Examiner trend engine. Following are descriptions of different elements of the histogram.

Chart Axes

The black numbers going along the bottom axis of the chart are called bins. Think of these as though they were tiny buckets into which are put outcomes from a test or experiment. In this case the outcomes are the different trend lengths which are experienced over a period of time. For example, a bin number of +3 means that the price of the stock went up for three days before going down again. The black numbers going along the vertical axis on the left of the chart represent the frequency or the number of times that the value in the bins on the x-axis have occurred in the data sample.

Chart Explanation

The above chart shows that for the stream of closing prices which were analyzed, there were no occurrences of any trends of zero length. That is because there is no orange bar drawn in for the zero bin. The innermost orange bars on this chart show that there were about 17 occurrences of trends of both +1 and -1. Another way to describe this is that there were 17 times when the price went up for one day and was followed by a downward trend of some length. Likewise there were 17 times when the price went down for one day only to be followed by an upward trend of some length.

The innermost bars of histograms are not necessarily symmetrical like this one is. (It is only a coincidence of this example).

In a Trend Engine output chart, you can see the exact value of a bin by just placing your mouse over it and the actual number will appear.

The next bar over from the +1 bin represents a situation where the price went up for a period of two days. According to this chart, this only happened about seven times. The -2 bin shows that the price went down for two consecutive days about nine times. All of the rest of the bars on this chart have similar explanations.

Longer Trends

You will notice that on the outermost bars there is a letter, not a number to describe the bin. In this case, the letter is an "M" which stands for "more." In the case of +M it means that there are the indicated amount of occurrences of positive trend lengths larger than the range of this chart. The -M is for showing occurrences of trend lengths in the downward direction, which are also longer than the lower range of the chart. For this example, there were no occurrences of trends which were ten days or longer.