PRICE CHARTING SYSTEM AND TECHNIQUE

• US 20090216684A1
• Filed: 11/18/2008
• Published: 08/27/2009
• Est. Priority Date: 03/24/2000
• Status: Active Grant

• Current Assignee: Microquant LLC
• Original Assignee: Microquant LLC
• Inventors: Helweg, Mark W.
• Granted Patent: US 8,195,553 B2
• Time in Patent Office: Days
• US Class Current: 705/36.R
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

The invention is directed to a market price charting method for displaying both current and historical price activity in terms of valuation rather than absolute price. The invention allows users to quantify the degree in which a market is overbought or oversold. Results may be displayed electronically or on a hard copy for viewing or used in additional analysis of a market.

Claims

1. A system for facilitating the making of a trading decision by an investor, said system comprising:

a programmable computer having a central processing unit (CPU);

a communication device linked to said computer for receiving a collection of price data relating to an investment from a data source;

a software program for providing a set of instructions to said computer to receive and process said collection of price data to generate volatility-adjusted relative price data related to the investment and to generate an indication of a state of a market for the investment as being currently traded at a fair value, as overvalued or as undervalued by assessment of the volatility-adjusted relative price data in relation to dynamic volatility intervals determined for the investment.

2. The system of claim 1 further comprising a display connected to said computer for showing at least one price chart comprising volatility-adjusted relative price data plotted relative to dynamic volatility intervals, the at least one price chart generated by said computer using said software program.

3. The system of claim 1 wherein the indication is used by a mathematical trading system to enter or exit an investment on behalf of an investor according to criteria input into the mathematical trading system.

4. The system of claim 1 wherein said communication device allows said computer to access a historical price datum.

5. The system of claim 1 wherein said communication device allows said computer to access real-time price datum.

6. The system of claim 4 wherein said communication device is a storage device.

7. The system of claim 4 wherein said communication device is a disk drive.

8. The system of claim 5 wherein said communication device accesses said real-time datum by a means included within a group consisting of a cable, a modem, a wire, a satellite dish, a radio antenna, and wireless communication systems.

9. The system of claim 1 wherein said set of instructions creates floating axis data and dynamic volatility unit data in order to generate said volatility-adjusted relative price data, said floating axis data and said dynamic volatility unit data being a function of historical price data.

10. The system of claim 9 wherein said floating axis data is adjusted based upon changing price data and consists of deviations of price above or below a floating axis over time where the floating axis represents a price function (F).

11. The system of claim 2 wherein said volatility-adjusted relative price data is represented on said at least one price chart relative to a floating time axis representing a financial asset price function (F) and another axis representing a price volatility interval function (I).

12. The system of claim 11 wherein said volatility-adjusted relative price data is further represented on said at least one price chart as a bell curve frequency diagram showing how often an asset price determined by said function (F) and said function (I) trades in said different volatility intervals determined by said function (I).

13. The system of claim 2 wherein said volatility-adjusted relative price data is represented on said at least one price chart as a function of a floating axis which is calculated as a function of price, relative to a calculated dynamic volatility unit, and a frequency diagram is generated from said volatility-adjusted relative price data reflecting the distribution of price data across said volatility intervals.

14. The system of claim 13 wherein said set of instructions provided in said software program includes causing said frequency diagram and said volatility-adjusted relative price data to be shown proximately to one another on said display.

15. The system of claim 13 wherein said set of instructions provided in said software program includes a command to said computer that causes said frequency diagram to be shown with a market status indicator, said indicator showing fair value, overbought and oversold market conditions.