Hong Kong Economic Time --- June 6, 2000

Features of ProSticks^®

Traditional bar and candlestick charts summarize daily market activities by merely displaying the open, high, low and closing ("OHLC") prices of the day. However, are the fluctuations that take place in the market really that simple? Are these "OHLC" prices sufficient in describing the market activities and sentiments in order for one to correctly forecast the short-term direction?

In any active trading markets, trading volume (or time duration) is as critical as price is for traders and investors. In particular, the volume traded at every price throughout a period (e.g. day) can reveal crucial information of the overall structure of the market. The distribution of trading volume across prices provide much more meaning and significance than just the "OHLC" prices. As a matter of fact, this price/volume relationship has attracted a number of research studies by both market participants and academic scholars. The prominence of this new dimension of knowledge has been recognized as such that by mastering this price/volume relationship, traders and investors will be much more equipped to be successful in the market.

ProSticks^® is an innovative charting system that provides crucial market information in addition to the Open, High, Low, and Close prices found in traditional charts. The extra essential elements are:

ACTIVE RANGE - The price range which is actively traded throughout the day. The ProSticks Active Range is the first standard deviation of the normal distribution and thus encompasses approximately 68% of all trading activities. It is thus the "fair value" of the market.

MODAL POINT - The heaviest traded price of the day. This is where most of the action is throughout the day. Thus, one can view the Modal Point as the equilibrium point for the day where there is strong support and resistance at this price level.

EXTREME TAILS - Indicate whether price experiences significant support and resistance when forming the day high and low.

The appearance of the Prosticks® bar is a hybrid of the Candlestick and OHLC Bars. Thus, traders will not find them unfamiliar, but rather, more informative.