WinMidas, Version 2.1 (Stokes Fishburne Associates). Software employing a price/volume analytical technique for market top and bottom detection. by John Sweeney The relationship between price and volume can be vague. Occasionally, it gives startling clues (for example, look at a chart of Microsoft with on-balance volume between February 1997 and December 1997), but usually, the information is ambiguous. While studying that problem in 1994, Paul Levine decided a fresh graphical approach to charting the relationship would help clarify the relationship. His work formed the basis of WinMidas software. WinMidas’s approach is to modify a standard chart of price versus time so it becomes a chart plotting price against cumulative volume (Figure 1). As pointed out at the very complete Website for WinMidas, “This has the effect of giving less visual weight to periods of relative inactivity, since the lower cumulative volume increase during such period compresses the daily points into a smaller space.” That is, if cumulative volume doesn’t grow much, the next price point is going to be very close to the previous price point. On the other hand, a high-volume day will move the next point along smartly to the right. |
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