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Zane,
Volume is indeed an important factor. As I see it, volume is best
expressed as the intensity of trading. It defines the amount of effort
that is required to move price "n"points. Of course, the "float" must be
considered in relation to the amount of volume in a trading period, and one
must factor the normal average trading volume of a security. Like driving
your car: if you start out from the light with moderate pedal pressure and
gradually accelerate to 60mph, it's ho-hum. If, however, you put the pedal
to the metal and zoom to 60 in 9.3sec, THIS represents power---something
has indeed changed. If anyone has an indicator that will factor how much
volume is required to move a security "n" points over "x" period of time
based on "y" the percent of float, please post.
Al Taglavore
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> From: diamond <diamond@xxxxxxxxxxxx>
> To: MetaStock-list <metastock-list@xxxxxxxxxxxxx>
> Subject: Looking for Volume Indicator
> Date: Saturday, February 07, 1998 10:59 AM
>
> Things are kind of quiet right now, so I'll post a question that has been
> troubling me. I am a short-term trader (three days to a couple of weeks).
I
> want to use volume to help my trades. I have tired testing Volume
> Oscillators and Volume ROC in my trades, but they both seem to give me as
> many false signals as good signals.
>
> I am beginning to think that volume may not be such a good indicator for
> buy and sell signals on short-term trading. A straight Volume indicator
> seems to be as good as any I have found, and it's not all that good. I
have
> read that some traders don't use volume at all, and that other traders
> don't agree on what volume signifies on the chart.
>
> I was trying to get my volume indicator to tell me two things when I was
> testing it.
>
> First, when the market is moving sideways, I was trying to separate the
> real MA uptrend buy signals from the false by looking for increase
volume.
> (Which does not always happen. Sometime volume even goes down, stays
about
> the same, or goes flat, on the start of an uptrend.)
>
> Second, after I am long, and the trend is going up, I want to separate
the
> false tops from the real top. That is, there are always several
adjustments
> on the way to the resistance level top, and I thought volume might help
me
> locate them so I would not sell to fast when the price crossed my MA. If
> volume would tell me what was going on (or give me some suggestion)
during
> these adjustments, I would know if I should get out then, or wait and
see.
>
> I have pushed price indicators to *my limits.*(Not your limit, buy mine.)
I
> can't seem to get much more out of them no matter what I try. I was
hoping
> to find some way to use volume to give me that extra 3% edge. But, to me,
> volume is just too weird. Sometimes it acts like it has no connection
with
> price, and other times it is right on the money.
>
> I am looking for a volume indicator that you think works, and under what
> circumstances. (Remember that I am a short-term trader, and that it has
to
> work with my trading.)
>
> Regards
> Zane Kori
> Abilene, Texas
>
> *
>
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