V.8:11 (413-416): The Market Facilitation Index Update: 1/89 to 3/90 by Charles F. Wright
Product Description
The Market Facilitation Index Update: 1/89 to 3/90 by Charles F. Wright
I have noticed through the years that when a technique is disclosed in the popular press you can count on it to stop working for some time after the disclosure. You can speculate as to why, but the most logical reason is that many individuals are testing it or trading it. With so many people looking at the system, it is not surprising that it does not work.
This may be the market's way of weeding out the inexperienced and the part-timers. Most novice traders test a new technique in the immediate period after its disclosure. If it is not instantly profitable they will abandon it in the face of sound historical data and begin anew their search for the best system. The Market Facilitation Index (MFI) was no exception to this phenomenon.
The MFI is calculated by dividing the range of an intraday bar (in this case a Standard & Poor's 30-minute bar) by its tick volume. The result is the number of points that the S&P moved for each tick during the bar. For instance, if the range of the bar is 200 points and the tick volume is 100 for the same bar, then the MFI = 0.500. This means that for every tick during this bar the S&P moved 0.5 points.
I have noticed through the years that when a technique is disclosed in the popular press you can count on it to stop working for some time after the disclosure. You can speculate as to why, but the most logical reason is that many individuals are testing it or trading it. With so many people looking at the system, it is not surprising that it does not work.
This may be the market's way of weeding out the inexperienced and the part-timers. Most novice traders test a new technique in the immediate period after its disclosure. If it is not instantly profitable they will abandon it in the face of sound historical data and begin anew their search for the best system. The Market Facilitation Index (MFI) was no exception to this phenomenon.
The MFI is calculated by dividing the range of an intraday bar (in this case a Standard & Poor's 30-minute bar) by its tick volume. The result is the number of points that the S&P moved for each tick during the bar. For instance, if the range of the bar is 200 points and the tick volume is 100 for the same bar, then the MFI = 0.500. This means that for every tick during this bar the S&P moved 0.5 points.
FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.
| Take Control of Your Trading. |
| Professional Traders' Starter Kit |
| All these items shown below only $299.99! |
| Click Here to Order |