Candlestick Chart Timing Encoding via Wick Positioning
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Solution Overview
Problem
Conventional charting methods, such as candlestick and OHLC charts, fail to provide specific information on when high and low prices occurred during a time period, leading to inaccurate and incomplete visual representation of market data.
Innovation Solution
The proposed solution involves generating enhanced candlestick charts with widening bodies proportional to the percentage of time traversal, separate upper and lower price bars, and tilting centerlines to indicate when high and low prices occurred, without relying on additional graphical indicators.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of information
If conventional candlestick and OHLC charts are used, then the chart structure is simple and easy to understand, but the timing information of high and low prices is lost
Solution Approach 1:
The patent segments the traditional single candlestick body into multiple components: upper wick, lower wick, and body, where each segment encodes different timing information. The upper wick position indicates when the high price occurred, the lower wick position indicates when the low price occurred, and the body represents the open-close price range. This segmentation allows timing information to be preserved without adding separate graphical indicators.
Solution Approach 2:
The patent utilizes the horizontal dimension (width positioning) of the candlestick to encode temporal information. Instead of using only vertical position and size to represent price data, the horizontal position of wicks and body within the time period dimension conveys when high and low prices occurred. This dimensional transformation allows timing information to be integrated into the existing chart structure.
2Loss of information
If additional graphical indicators are added to show timing of high and low prices, then timing information is preserved, but the chart becomes more complex and harder to interpret
Solution Approach 1:
The patent merges the timing information representation directly into the existing candlestick structure by positioning the upper and lower wicks at horizontal locations that correspond to when high and low prices occurred. Instead of adding separate indicators, the wick positions themselves carry dual meaning: both price extremum levels and their timing within the period. This merging maintains chart simplicity while preserving timing information.
Solution Approach 2:
The candlestick components serve multiple functions: the upper wick indicates both the high price level and its timing, the lower wick indicates both the low price level and its timing, and the body represents both open-close prices and the active trading period. This multi-functionality allows a single chart element to convey multiple pieces of information without increasing visual complexity.
3Loss of information
If traditional fixed-width candlesticks are used, then the chart displays efficiently with uniform appearance, but the time traversal information is not visually represented
Solution Approach 1:
The patent introduces dynamic width variation in candlesticks based on the percentage of time traversal. Instead of uniform fixed-width candles, the width of each candlestick body and wick varies proportionally to how much of the time period was actively traversed or utilized. This dynamic shaping visually encodes time traversal information while maintaining the candlestick form factor.
Data Source
AI summary
A method includes displaying a first technical indicator representative of changes in price during a first time period, wherein the changes in price include a first open price corresponding to a start time of the first time period, a first highest price corresponding to a first time within the first time period, a first lowest price corresponding to a second time within the first time period, and a close price corresponding to a third time within the first time period, receiving a plurality of prices, each price of the plurality of prices corresponding to a particular time within a second time period different from the first time period, determining, from the received plurality of the prices, a second open price corresponding to a start time of the second time period, a second highest price corresponding to a first time within the second time period, a second lowest price corresponding to a second time within the second time period, and a last price corresponding to a third time within the second time period, generating an intra-time period technical indicator value corresponding to a relationship in price between (1) at least one of the first open price, the first highest price, the first lowest price, and the close price and (2) at least one of the second open price, the second highest price, the second lowest price, and the last price, generating, from the generated intra-time period technical indicator value, a second technical indicator representative of changes in price during the second time period, and displaying a relationship between the first technical indicator and the second technical indicator.