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I fooled with volume many, many years ago and have
not used it as I found that it was a detractant. I had worked with Joe
Granville's variation, Mark Chaikin's variation on a theme, Larry Williams'
Variation, Sibbett's Demand Index, along with Aspray's Demand Oscillator.
I have worked with issues and Bolton-Trembly advancing, declining issues along
with Schultz's theory and the ever famous McClellan Oscillator.
I have looked at key reversal days and other volume
based trading indicators and found them lacking. You seem to use volume as
a supply demand criteria and price as the trading criteria. Which of the
above volume systems do you use? Have you developed a volume indicator
that varies from the above noted?
Because volume was not of use in the system that I
use does not mean it can't be useful for someone else. The only test of an
indicator is if it adds value to your trading decisions.
Thanks for your input and posts they keep one
thinking. Ira.
----- Original Message -----
Sent: Thursday, November 18, 2004 6:41
AM
Subject: Re: [RT] See gif---Just for
fun!
Rakesh,
One indicator I check very carefully when buying retracements is volume.
I want to see volume declining on the retracement and picking up on any move
up. I use On Balance Volume as a very quick guide and then read the individual
volume bars if a security's OBV looks interesting. I generally don't buy
stocks making fresh lows, however were I to consider doing so, I would want to
see a large volume divergence on the new low. I would look for a setup in
three steps: 1) some bars back a big decline on very high volume (the washout)
and 2) several days of decline to a new low on very light volume, and 3) a
move above the high of the low bar on strong volume with a stop at the
low.
DHOM had a washout volume day a few days ago but the price bar was too
tight and barely made a new low so the washout is suspect. Volume has
dropped on the lower lows, however it remains above the typical volume prior
to the washout day. Caution is warranted
VITA has seen increasing volume on the recent down days. Caution is
warranted.
OLGC ditto.
ROIA ditto plus ragged volume.
Not saying that one can't make money here, but these are not the king of
low risk entry which I seek.
Earl
----- Original Message -----
Sent: Wednesday, November 17, 2004 8:54
PM
Subject: Re: [RT] See gif---Just for
fun!
Following look reasonably safe to enter, from a
chart
perspective only. Dont know about their fundamentals.
[1] VITA
[2] OLGC
[3] ROIA
[4]
DHOM
Any
opinions?
Regards
Rakesh
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