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----- Original Message -----
<DIV
>From:
<A title=greg.bean@xxxx
href="">greg
To: <A title=amibroker@xxxxxxxxxx
href="">AmiBroker@xxxx
Sent: Monday, July 01, 2002 1:06 PM
Subject: [amibroker] EquiVolume charting
in AB ?
Hi,
I've been reading Trading on Volume by Donald Cassidy
and have been made aware of a way of charting price and volume in the same
chart window in candle stick fashion. <A
href="">www.pcquote.com has this style of charting
available on its' website.
Price is charted on the vertical axis and volume is
on the horizontal axis. So, if there was heavy volume during one candle the
rectangular box would be wider than on an average volume day. This is supposed
to make it easier to see the effect of volume on the price action.
Correct me if I get this wrong. The system was
developed by Richard Arms ( also developed ARMS Index, a.k.a.
TRIN).
The width of the average bar was set by using two
thirds of the average volume over the last 30 days and round it off to nearest
100,000 (this might vary). For example if that value was 2 million sharesthe
volume would be one unit wide, then if the stock traded 4 million shares the
candle would be two units wide. If 3.9 million shares were traded you would
still see a candle only one unit wide. That's hiding the extra volume, so
maybe something should be added to make it two units wide. I don't know what
this fudge-factor could be.
Tall skinny candles would show that the price can
move easier without much influence by volume. You could expect price to
reverse direction at any time.
Wide candles represent significant areas of price
supply ( if at the upper extent of a price move), or of demand or supportat
the lower ends of moves. The wider candles draw attention to them for further
study and interpretation.
This is only a brief summary of the charting method
as I understand it now . I'd like to be able to have these charts in AB and be
able to study them and do some backtests.
Is anyone familiar with this method of
charting?
This is a standard charting technique
known as equivolume that is available as a canned study in a number of
charting programs.
How could it be implemented in AB?
GregYour
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