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I once read somewhere that volume and Average True Range are highly
correlated. I've never done a study that confirms or denies this
statement. ATR is a lot more versatile for use in a system, though.
I've not encountered anything that contradicts this claim. Any
comments?
BrentinUtahsDixie wrote:
>
> I thought that there was always some kind of a secret that could unlock the
> riddle of trading in Volume and Open Interest. But after years of looking
> there are only a few week applications that have made sense. Here is one if
> the V is up and the OI is up and the prices is up then the trend if up is
> confirmed. Just turn that around V up OI up and Price down a down trend is
> confirmed.
>
> Brent
>
> ----------
> > From: charles meyer <chmeyer@xxxxxxxx>
> > To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> > Subject: Re: sp500 update
> > Date: Friday, October 30, 1998 7:21 AM
> >
> > Ben, Earl, & Group:
> >
> > The most striking aspect of
> > > this huge rally is the lack of volume and failure of OBV to confirm the
> > > rally - this is especially noticeable in the S&P futures and SPY.
> >
> > Anyone out there who has been able to solve the riddle of the inter-
> > relationship between price and volume? I am a Wyckoff student--before
> > that a Don Wordon student. I have a great file on volume information
> > but am baffled and confounded by Earl's observation; have been for a
> > long time. The Wyckoff explanation just doesn't seem to work in real
> > time--volume can be very misleading. I always wanted to believe Joe
> > Granville's statement that 'price leads volume' but can't get a handle on
> > how to trade it. Perhaps the best answer, from someone I respect, was
> > the idea that I put too much emphasis on volume. Seems it is so easy
> > to manipulate volume and the stats are skewed by program trading and
> > option activity. Comments?
> >
> > Charles.
> >
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