The hAnDbOOk Of TeChnICAl AnAlysIsD, and so on. We observe prices moving between $100 and $125 within the first half
hour. In the second half hour, prices moves between $90 and $115. We continue as-
signing a new letter to all half‐hour price movements for each successive period. In
the illustration, we tracked exactly two‐and‐one‐half hours worth of price activity,
that is, A to E. We now collapse all the letters to the left‐hand side, filling up all emp-
ty spaces to the left, and we end up with a bell‐shaped distribution of price activity.
It is now obvious that the prices with the most activity over the two‐and‐one‐half
hours are $105 and $110. This represents the prices with the greatest agreement
with value. This distribution represents the profile of market action.
figure 17.4 Representing Price as Frequency Distribution Displayed Sideways.
figure 17.5 Representing Price Activity as a Bell‐Shaped Distribution.