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Strategies & Market Trends : NetCurrents NTCS

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To: Chip McVickar who wrote (4611)	11/15/2000 2:21:55 AM
From: Michael Watkins	Read Replies (1) of 8925

I've personally found little use for OBV and such indicators on stocks or commodities. OBV: If Close[0] > Close[1] Then OBV = OBV[1] + Volume Else If Close[0] < Close[1] Then OBV = OBV[1] - Volume Else OBV = OBV[1]; End; Or in english, add the volume to the previous total if Close is higher than yesterday's close; subtract if lower; assign the same value as yesterday's value (no net change) if the close was the same. Pretty simplistic, all or nothing approach. As a result the indicator plots in a manner similar to price to some degree. I don't have the formula for VAO, thought I did. I seem to recall running across some Chaiken stuff in my system trading daze - wasn't it taking a percentage of volume and assigning it to the indicator based on where in the bar price closed at? That intuitively sounds better... ... although I prefer unvarnished volume bars to indicators. Certainly on stocks but even on the ES/SP/NQ/ND -- though all we have is tick volume, it still is often an aid to analysis. Having said all this, I do have some index charts where I plot Cumulative Volume (up vol and down vol) on the daily charts and sometimes find it interesting if not always useful.

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