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Jim,
I've been using Equivolume charts ever since Arm's published his
book on it way back in the 60s. I switched to CandleVolume when Equis
included it in MetaStock. Arm's thesis is that Equivolume charts are
more predictive then standard HLC bar charts since volume effects
price more than the lapse of time. That always made since to me and
it's been my experience that Equivolume trend lines and channels are
better indicators. I'm sure there will be a lot of people that
disagree with that statement, but it does seem to work for me.
Let me put it another way, aren't you concerned that your trend
lines are distorted because you don't adjust them for volume <G>?
Jim
From: Wooglinx@xxxxxxx <Wooglinx@xxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Thursday, September 10, 1998 10:19 PM
Subject: Re: DELL
>Jim:
>
>I agree that DELL has the potential to move higher tomorrow based on
the INTC
>projected sales report after today's close.
>
>I have a question on the validity of drawing trendlines on
Candlevolume
>charts. That is, should the volume significantly exceed the average
volume,
>the X axis would be radically distorted relative to the price axis on
that
>day. In a mathematical context one could test this by using extreme
limits on
>volume of zero or infinity.
>
>In the case of DELL, with the volume swings probably not more than
plus or
>minus 20% of the average over six months, the error may not be
significant
>when making generalized decisions. On the other hand, setting
specific price
>targets may, IMHO, be questionable.
>
>Is this a valid concern and, if so, how do you handle the dilemna?
>
>Jim Barone
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