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Steve/
With your experience perhaps you are better positioned to offer a
lesson.
The Money Flow Index is calculated from volume and price. Isn't there a
problem with using volume for futures? My understanding is that with
each day's futures data you get today's prices but yesterday's volume
and open interest. Is that not so? Since MFI reads the positive and
negative money flow over the period specified it could be that the
effect of the lag is minimised.
A quick check of my books on futures finds almost no reference to
volume. LeBeau and Lucas "Computer Analysis of the Futures Market" ends
a short section on volume "... volume analysis works well in the stock
market but not in futures." You may have a breakthrough.
Harvey Pearce, Victoria, B.C., Canada
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Steve Karnish wrote:
>
> Dear Listees,
>
> Is anyone interested in discussing the technical merits of the
> Money Flow Index? I think it has some potential. I've noticed
> when applied to the grains, it's the only indicator to
> successfully trade off the bottom of the current downtrend. As
> we all know (I hope), oscillators are pretty good at timing you
> into a short position in a downtrending market and into a long
> position in an uptrend. Few oscillating indicators can buck the
> trend and be successful.
>
> I've observed that when the MFI hit 0 (zero) in Corn this year
> (twice and then again yesterday), the market rallied 17 and 35
> cents (quite the trick in this dismal market). Of course, the
> sell signals, when it reached 100, were really fantastic trades.
> (I'm using zero and 100 as buy and sell signals as broad
> references).
>
> So, who's responsible for this index? Has anybody out there
> used it or incorporated it into daily or intraday analysis? Is
> anyone interested in a survey of popular technical indicators?
> I learn something new about technical analysis everyday. The
> funkymentals have never put a dime in my pockets (with the
> exception of the time my dentist client had contacts with
> corrupt high ranking Mexican officials and learned that the Peso
> would soon be devalued...but, that was a once in a lifetime gift
> from the trading gods). Please help me with my lesson for the
> day.
>
> Steve Karnish
> CCT
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