I just came across the "Woods Floating Indicator" and I have to admit, its very intriguing and potentially beneficial. It seems to me that this helps to bridge the gap between price movements and volume. I've always paid a great deal of attention to volume, probably moreso than other traders so I was pretty excited when I learned about these tools. They say volume leads price.
Basically, his idea is that there are "turnovers" at the tops and bottoms. Obvious, right? He uses three different indicators (rather cumbersome admittedly) to keep a running total between different points of shares traded. You can see at consolidation points where the weak hands have sold into the strong hands and vice versa at the top by looking at the relationship between the outstanding float, shares traded, and resulting price action due to the flux between supply and demand.
I think its more useful to swing traders (keeping track of how long it tacks for the majority of float shares to be accumulated before price action follows) in equity markets (no futures) and in established companies (no IPOs). His indicators are kind of cumbersome (he uses lines and dots), but it seems to me that his indicators (if he could condense them into a more sensible approach) could conceivably gain as much stature as candlesticks vis a vis bar charts. Of course, I also think its bullshit that he's charging a fee for his indicators for use on Tradestation, Metastock, etc. and thus limiting its widespread distribution.
Any thoughts?
P.S. Here's a link to some info: It isn't widespread right now so info is harder to find. Be nice if the indicators were free, but I suppose he can make as much $ on royalties as through trading.
http://www.traders.com/Documentation/FEEDbk_docs/Archive/1296/Abstracts1296/1296Woods.html
Basically, his idea is that there are "turnovers" at the tops and bottoms. Obvious, right? He uses three different indicators (rather cumbersome admittedly) to keep a running total between different points of shares traded. You can see at consolidation points where the weak hands have sold into the strong hands and vice versa at the top by looking at the relationship between the outstanding float, shares traded, and resulting price action due to the flux between supply and demand.
I think its more useful to swing traders (keeping track of how long it tacks for the majority of float shares to be accumulated before price action follows) in equity markets (no futures) and in established companies (no IPOs). His indicators are kind of cumbersome (he uses lines and dots), but it seems to me that his indicators (if he could condense them into a more sensible approach) could conceivably gain as much stature as candlesticks vis a vis bar charts. Of course, I also think its bullshit that he's charging a fee for his indicators for use on Tradestation, Metastock, etc. and thus limiting its widespread distribution.
Any thoughts?
P.S. Here's a link to some info: It isn't widespread right now so info is harder to find. Be nice if the indicators were free, but I suppose he can make as much $ on royalties as through trading.
http://www.traders.com/Documentation/FEEDbk_docs/Archive/1296/Abstracts1296/1296Woods.html
) so it is normal that it is not perhaps superior to a break out system on short term scale but on higher scale it should be superior since it is based on a more fundamental approach. They should also be able to detect the exit point whereas breakout system gives you an entry but no exit. Now I can't speak for them since I don't know exactly what they offer. I just speak of float analysis in general. Normally traditional float analysis is not to be used alone because it is rather qualitative so that it can be complemented by breakout system for monitoring a more precise entry and stop level. So FA is used in this case as filtering market context which is much more difficult to apprehend because it concerns long term trend.