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Strategies & Market Trends : TA Science Projects & Experimental Indicators

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To: Tim Fierro who wrote (74)	2/11/1998 10:55:00 PM
From: ftth	Read Replies (2) of 237

Hi Tim, the formulas that divvy up the days volume as "buying volume" versus "selling volume" are the ones with "accumulation/distribution" or "money flow" in the names. There's a few different ways to view this, but most use (h-l) in the denominator, and some combination of o-h-l-c in the numerator. Chaikin uses {[(c-l)-(h-c)]/(h-l]}V; several people use [(c-o)/(h-l)]v. Then the result is accumulated and possibly averaged. In your post you said "I am assuming that if Today's Open is greater than yesterday's, then there are buyer's etc.." If todays open is above yesterdays open, but below yesterdays close, there's supply pressure. Most indicators of this type use the days data only (there was an earlier post where I talked about this) because gaps have no volume associated with them, then they smooth the results. That's not to say that a similar indicator using day-to-day change isn't possible. By all means, experiment! You may find something very useful--even if it's not what you originally set out to find. I'm looking at some Accum/dist experiments also, so we'll have to compare notes. Mine are real obscure though, so I want to mess with them for a while before I post. They make more logical sense to me though, so I may use them in place of the "conventional" a/d or money flow indicators even if they are just equal, on average, in their accuracy. dh

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