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This may work on a portfolio better than on a single security. OBV seems to
work about as good or better than a number of other volume indicators that
are in the Metastock library.
There seems to be a big increase in volume after a big drop. there dows not
seem to be a high correlation between volume and price. Maybe if we had
easy access to volume per trade the correlation would be better.
Have you looked at positive and negative volume? Several decades ago the
developer of +ve & -ve volume determined that the market had changed and that
-ve volume was no longer working. However perhaps conditions have changed
again so that this may now be a good indicator.
Lionel Issen
At 09:51 AM 2/9/98 -0500, RXR wrote:
>I should know better, but here goes.
>
>I have a fairly simple system test based on the weekly DJIA from '83 thru
>'96 that as far as I can tell is based solely on volume predicting price
>direction. It does 2X B&H % gain over this time with no losing trades.
>
>Not sure you would want to use it to trade the DJIA, but it "proves" to me
>at least that volune does predict price direction enough to trade the DJIA.
>
>I won't give out the formula since I haven't really had a chance to use it
>in other areas. Wouldn't you know it.
>
>This isn't any worse than some people assuming they know more than they
>might. Let's all keep an open mind . . . You can't learn anything new by
>assuming you know it all already . . .
>
>Now be nice.
>RXR
>
>
>
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