Indicators | JUN 2004
Using Money Flow To Stay With The Trend by Markos Katsanos
V. 22:6 (40-51): Using Money Flow To Stay With The Trend by Markos Katsanos Avoid impending disasters and stay on the right side of the trend with the volume flow indicator. In their classic Technical Analysis Of Stock Trends, Robert Edwards and John Magee make an appropriate introduction to my topic: Changes in trend, which represent an important shift in the balance between supply and demand … are detectable sooner or later in the action of the market itself. The … real value of a share is determined at any time … by supply and demand, which are accurately reflected in the transactions consummated in the floor of the New York Stock Exchange. It is this change in supply and demand that I attempted to detect and quantify with my new indicator, which I call the volume flow indicator (VFI). Why this new indicator? I was looking at the performance of some stocks that I had sold six to eight months earlier because of short-term sell signals. These same stocks had since doubled in price, or in some cases tripled. Since small, random price movements tend to distort the underlying trend, I thought I’d create a long-term money flow indicator. THE VOLUME FLOW INDICATOR The rationale behind VFI is not new, but merely an improvement on Joseph Granville’s approach to the classic on-balance volume indicator (OBV). In designing the VFI, I attempted to improve on the following...
by Markos Katsanos
Technical Analysis of STOCKS & COMMODITIES
The Traders’ Magazine since 1982
has had over 1,226,237 subscribers from 174 different countries.
37,000 Page Traders’ Archive for $89.99
To continue reading, sign-up for trial access to Traders.com and the S&C Archive — 37,000 pages of trading ideas!
After verifying your email address, you will have limited access to the S&C Archive, as well as access to a Digital Edition of S&C, and access to Traders.com Advantage and Working Money for 30 days.
Not a subscriber to Technical Analysis of
STOCKS & COMMODITIES magazine?
Click
here to subscribe, or request
a trial subscription.
Log-in now to view articles from the S&C Archive.
Your Subscriber ID is located at the top of your magazine label, highlighted here in red.
Your last name can be found on the second line, highlighted here in blue.
*If you have a company name on the label, that can also be used. It will appear below your name on the label.
If you do not have a Subscriber ID on your label, you can find it on your statement or renewal form.
For help locating your Subscriber ID number, please call us at 1-800-832-4642 or send an email to Survey@Traders.com. If sending an email, please include your name and mailing address.