Timing The Move by Lorne W. Rae
All traders want to know in advance how long a price trend will last. Try predicting it with this technique.
A note in Robert Edwards and John Magee’s Technical Analysis Of Stock Trends states, “Volume is of the utmost importance in all technical phenomena,” but then Edwards and Magee add, “... the exact number of shares traded is not important.” Over the half century since this work was first published, not a lot of attention has been paid to absolute volume, but it’s time to take a closer look at this concept. We might just find that the number of shares traded can indicate the length of a price trend.
SHAREHOLDERS AND PRICE
Price is determined at a moment in time when two individuals (or their agents) meet and agree to exchange a specific amount of money for a certain number of shares of stock. Once they finish their business, they depart and are replaced by another pair of individuals who establish the next price, and so on.