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Worden promotes their own volume tool ... Segmented Volume or something like
that ... of course the formula is proprietary so technicians are unable to
examine or debate the assumptions made. You are correct in saying that
volume viewed by itself will not yield a profitable trading strategy. There
are times when there is a message in volume and times when there is none.
OBV or other volume indicators provide a quick, visual clue as to when there
may be worthwhile content in examining the relationship of individual volume
bars to price. The trader who knows how to use volume gains an edge when the
volume bars show divergence from price action e.g. rising price on declining
volume or a rally on strong volume followed by a correction on very light
volume.
Earl
----- Original Message -----
From: "charles meyer" <chmeyer@xxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Saturday, February 02, 2002 6:21 AM
Subject: Re: [RT] CV or On Balance Volume
Re: [RT] CV or On Balance VolumeBob:
Interesting and amazing trivia. I read somewhere that his mom was a card
reader in
a carnival. I had both those books; and that was a long time ago.
IMHO....OBV can
be mostly relegated to the rubbish heap of broken indicators. I take little
risk in saying that;
for the statement probably applies to 95% (99%?) of the stuff that's out
there. About the
best discourse I've read as to why volume doesn't work like it used to was
written by
the elder Wordon. I think that little brochure is available to anyone who
inquires about
TC2000 products. I think they use volume as a useful tool mostly for
individual stocks. Anyway, Worden claims it is less reliable on indexes.
As for the Daily Strategy Book; I once tried to compile a consensus type
strategy of what the market would do the next day using those ideas. I
never got anywhere with it. Of course these opinions might well be
related to my lack of skills as to how to use this information. Tons of
stuff written about
volume tools but I concluded that none of them; used alone; are consistent
enough to
be profitable; at least if you are interested in low drawdowns and high win
percentages.
An interesting aside. Would you let an ex-magician manage a portion of your
money?
Believe it or not; there is such an individual new to the money management
scene. Lends new meaning to the term: "Now you see it; now you
don't"....referring to your money of
course.<g>
Chas
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