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> BUT past performence is NOT a guarentee for future results
Noted
> Also money flow measured in a quote machine is wrong
> see s&c magazine article on page 64
> basically accumilation on a stock is only if the purchase price is a:
> above yesterday close and b: if it was puchased above todays open
> and c: if it was purchased in the UPPER 25% of todays trading range
> all 3 conditions must exsisst
> if you do obv this way you will have lead time knowlege of what stocks to
buy
Noted, will look up said article and learn from it.
Let me try and clarify where my money flow thing comes from:
Let us take trader A and B.
A buys 10,000 shares at the offer (desperate to buy)
B sells 100 shares.at the bid (desperate to sell).
The dollar money flow impact of a 10,000 share trade bought at the offer
price is greater than the dollar impact of a 100 share trade sold at the
bid.
Hence, net new money went into the stock REGARDLESS of what happened to
price after the trades are done.
I
n the event that price closes below the 100 lot trade, the 100 lot seller
has the upper hand in terms of ROI, and in the event the close is below the
10000 lot buyer's trade price, the 10,000 lot buyer has a ROI loss.
But the stock still got "accumulated" since more money went in than came
out.
OBV is not what I intended to calculate - and you/the article may be totally
right in that method and the implications of what it defines as accumulation
and distribution. Maybe I should use some other terminology - hopefully this
will clarify.
All I mean to highlight is that there is more money going in than coming out
in the present market at tick level when the dollar impact of each trade is
netted out.
Of course, we trade price and all this is academic discussion and all 3 of
us know to trade what we see and to protect ourselves against what we don't
see - but since both you and Earl were doing a fun filled tap dance and the
list was quiet, I thought I'd invite myself to the party :)
No offense Big Ben and Earl :) See, I and the list got to learn about this
method of OBV.
G
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