What is a Histogram?
A histogram is a visual display of information. It uses bars to show the frequency of an item of data in successive intervals.
How Does a Histogram Work?
A price by PBV chart) is a common horizontal histogram that shows a cumulative total of how many of a traded at a given price. The bars show the trading . In our sample histogram for Cisco Systems (Nasdaq: CSCO) (and in many charts of this nature), there is also a line indicating the price.
The longer the horizontal bar on the histogram, the more that are trading at a given price.
Why Does a Histogram Matter?
In the finance world, histograms are very useful because they indicate where the action is. In our example,
Accordingly, a histogram in this context could help try to predict when the encounter and -- that is, when a reach its top and bottom price. This in turn helps decide when to buy and when to sell. It is important to , however, that histograms are just one of many charts that use.