histogram

noun his·to·gram \ ˈhi-stə-ˌgram \
Updated on: 13 Oct 2017

Definition of histogram

: a representation of a frequency distribution by means of rectangles whose widths represent class intervals and whose areas are proportional to the corresponding frequencies

Recent Examples of histogram from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'histogram.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Origin and Etymology of histogram

Greek histos mast, web + English -gram


Financial Definition of HISTOGRAM

histogram

What It Is

A histogram is a visual display of information. It uses bars to show the frequency of an item of data in successive intervals.

How It Works

A price by volume chart (PBV chart) is a common horizontal histogram that shows a cumulative total of how many shares of a stock traded at a given price. The bars show the trading volume. In our sample histogram for Cisco Systems (Nasdaq: CSCO) (and in many charts of this nature), there is also a line indicating the stock price.

The longer the horizontal volume bar on the histogram, the more shares that are trading at a given price.

Why It Matters

In the finance world, histograms are very useful because they indicate where the action is. In our example, note that the longest bar relates to the $27.50-$32.50 price range, meaning that the most trading volume in this stock occurs when the shares are trading between $27.50 and $32.50. Obviously, lots of trading volume also occurs in the $32.50-$37.50 range, but relatively few buyers and sellers want to trade when the stock is in the $42.50-$47.50 range or anywhere north of $70.

Accordingly, a histogram in this context could help analysts try to predict when the stock will encounter support and resistance -- that is, when a stock will reach its top and bottom price. This in turn helps analysts decide when to buy and when to sell. It is important to note, however, that histograms are just one of many charts that analysts use.


Medical Dictionary

histogram

noun his·to·gram \ ˈhis-tə-ˌgram \

medical Definition of histogram

: a representation of a frequency distribution by means of rectangles whose widths represent class intervals and whose heights represent corresponding frequencies

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