Arms Equivolume Charting System
by Dr. James S. Gould
Knowing that XYZ stock was up 5-1/4 points, ABC dropped 3 points and AAA was unchanged is
about as useful as knowing the late sports scores were 12-to-8 and 9-to-5. The information gives little
clue as to what happened, how it happened and what might happen the next time around.
Similarly, conventional stock and commodity charting that disregards trading volume is about as helpful
for in-depth technical analysis as a synopsis of stock market events or sports scores on the late-night TV
news. Equivolume charting incorporates both price and volume to provide a more complete assessment
of each day's supply/demand balance.
An Equivolume chart expands the price bars of a conventional bar chart horizontally by the amount of
volume in the trading day (Figure 1). The result is a series of boxes undulating across the chart. (For an
exemplary use of Equivolume charting, see "Trading T-bonds with Equivolume," Stocks & Commodities,