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Ian:
All of Richard Arms' volume indicators are built into
Metastock. For one of them VAMA, Volume Adjusted Moving Average, the algorithm is described but not specified
with precision. You might want to look at Metastock.
Leslie
>
> From: Ian MacAuslan <imacauslan@xxxxxxxxxx>
> Date: 2003/01/10 Fri PM 03:08:21 EST
> To: omega-list@xxxxxxxxxx
> Subject: Volumentum indicator-
>
> I came accross this recently and wonder if anyone else has EL code for this?
> ta,
> Ian
>
> The Volumentum indicator is a set of tools. There are three indicators,
> the Volumentum line, Volumentum strength and Volumentum direction. The
> Volumentum direction indicator is derived from the Volumentum line and
> Volumentum strength. The direction indicator takes information from the
> Volumentum strength and Volumentum line and incorporates additional
> algorithms to prevent false signals during periods of directional
> uncertainty prior to an established trend being in place. At their core,
> they are built upon research done by Richard Arms, whos revolutionary
> theories have changed the way investors perceive the markets, and
> creator of the Arms Index also known as the Short-Term Traders Index
> or TRIN which has become one of the most important technical indicators
> on Wall Street. The Arms Index was developed by Richard Arms in 1967.
> Over the years, the index has been referred to by a number of different
> names. When Barron's published the first article on the indicator in
> 1967, they called it the Short-term Trading Index. It has also been
> known as TRIN (an acronym for TRading INdex), MKDS, and STKS. The TRIN
> indicator is generally used as a short term trading tool and looks more
> like an oscillator. In its traditional form, the Index shows whether
> volume is flowing into advancing or declining stocks. If more volume is
> associated with advancing stocks than declining stocks, the Arms Index
> will be less than 1.0; if more volume is associated with declining
> stocks, the Index will be greater than 1.0. The TRIN indicator is really
> a general market index and is not very useful for individual stocks. To
> find a solution for individual stocks, Richard Arms extended his
> original theories and focused on volume as a key point of reference for
> chart patterns. The theory behind the research is that stock prices move
> in a volume based frame of reference versus a time based frame of
> reference and that the periods of the heaviest volume often mark
> important turning points for the stock price. At ChoicePicks.com we used
> some of the fundamental concepts behind the work done by Richard Arms,
> and that is the volume based reference. We took the basic theories and
> integrated it with a number of technical analysis tools such as moving
> averages and divergence techniques to create the Volumentum indicator.
> Below is a graph with the indicators and a discussion about each
> individual elements that make up the Volumentum indicator set.
>
> You can plot the Volumentum indicator on your own charts.
> Go to Volumentum.com for more information.
>
> The Volumentum Line
> The Volumentum line compares the short-term price-volume (PV) action
> with the long-term PV action to determine momentum. The zero line
> depicts the relationship between the short-term and long-term PV action.
> PV is important from the perspective that it signals conviction behind a
> price move, or in other words, short term momentum versus long term
> momentum.
>
> Rising versus declining Volumentum line: If the short-term price-volume
> action is rising faster than the longer-term price-volume action, the
> Volumentum line will be rising. If the short-term price-volume action is
> falling faster than the longer-term price-volume action, the Volumentum
> line will be declining. The Volumentum line provides you with
> information about long term versus short term momentum of the stock. It
> can be interpreted as positive when short term momentum is much stronger
> than long term momentum.
>
> Volumentum line above or below zero: If the strength of the short-term
> price-volume action is falling but it is still stronger than the
> long-term price-volume action, the Volumentum line will be declining but
> will remain above zero. Once the strength of the short-term price-volume
> action weakens enough to fall below the strength of the long-term
> price-volume action, the Volumentum line will fall below zero. If the
> Volumentum line is below zero and rising, it indicates that the strength
> of the short-term price-volume action is increasing, but that has not
> yet risen above the level of the long-term price-volume action.
>
> The Volumentum line is really the core of the Volumentum indicator. Next
> we will discuss two more elements of the Volumentum indicator. Together
> the indicator will provide the trader with power trading signals.
>
> Volumentum" strength indicator
> The Volumentum strength indicator takes the information from the
> Volumentum line and smoothes it to eliminate a lot of the erratic
> movements and provide more stable signals. It then displays the results
> in the form of a histogram or an area chart. Blue lines (or a blue area)
> above the zero line indicates the short-term strength of the
> price-volume action is increasing and that it is also stronger than the
> long-term price-volume action. This indicates that an uptrend is likely,
> given that momentum is positive. Red lines below zero indicate just the
> opposite, which means the short-term strength of the price-volume action
> is decreasing and that it is also weaker than the long-term price-volume
> action. This indicates that a downtrend is likely, given that momentum
> is negative.
>
> Volumentum" direction indicator
> The Volumentum direction indicator (colored bar) combines the
> information from the Volumentum line and the strength indicator with
> additional support-resistance and trend filters to further eliminate
> false signals caused by erratic price fluctuations. The information is
> then displayed in a color-coded bar, where blue areas indicate the high
> probability of an uptrend, red areas indicate the high probability of a
> downtrend, and gray areas indicate neutral or transitional times for a
> stock or market. The Volumentum direction indicator is designed to
> indicate the direction of the current trend of prices in areas with high
> probability of it continuing over the intermediate term.
>
> You can plot the Volumentum indicator on any stock using the following link:
> http://www.prophetfinance.com/affiliates/choicepicks/sc.asp
>
>
>
>
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