Charting Techniques  |  NOV 2005

Chart Your Stocks With Float Charts by Steve Woods

Stocks & Commodities V. 23:11 (20-27): Chart Your Stocks With Float Charts by Steve Woods Price is king. Volume is queen. Both live in the context of time. But is there a prince or prime minister who has been overlooked? Float charts may have the answer. In my 1996 STOCKS & COMMODITIES article, I introduced the cumulative volume float indicator and In demonstrated a dynamic relationship between a stock’s price and volume and its floating supply of shares. The idea was simple: by adding up volume cumulatively on a chart, we can identify rectangles that correspond with areas of accumulation at the bottom and distribution at the top. Since then, I have come to realize that what I discovered was not just a new indicator but an entirely new type of stock chart. To understand, consider this question: What data goes into creating a stock chart? Price and volume. Is there a piece of data that stock charts have not been using? If the historical pantheon of charting begins with candlesticks, then goes to point and figure, then moves on to price & volume, I would ask: Is there a fourth way of charting stocks? Is there an overlooked piece of data which, when used properly, actually creates a new type of stock chart? Is there a new way to look at what is happening in a stock’s trading history? Yes! The missing data is the float number. The new type of chart is a float chart, and its origins go back to W.D. Gann’s book, Truth Of The Stock Tape, originally published in 1923.

by Steve Woods