Stocks & Commodities V. 23:11 (20-27): Chart Your Stocks With Float Charts by Steve Woods
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Stocks & Commodities V. 23:11 (20-27): Chart Your Stocks With Float Charts by Steve Woods
Price is king. Volume is queen. Both live in the context of time. But is there a prince or prime minister who has been overlooked? Float charts may have the answer.
In my 1996 STOCKS & COMMODITIES article, I introduced the cumulative volume float indicator and In demonstrated a dynamic relationship between a stock’s price and volume and its floating supply of shares. The idea was simple: by adding up volume cumulatively on a chart, we can identify rectangles that correspond with areas of accumulation at the bottom and distribution at the top. Since then, I have come to realize that what I discovered was not just a new indicator but an entirely new type of stock chart.
To understand, consider this question: What data goes into creating a stock chart? Price and volume. Is there a piece of data that stock charts have not been using? If the historical pantheon of charting begins with candlesticks, then goes to point and figure, then moves on to price & volume, I would ask: Is there a fourth way of charting stocks? Is there an overlooked piece of data which, when used properly, actually creates a new type of stock chart? Is there a new way to look at what is happening in a stock’s trading history? Yes! The missing data is the float number. The new type of chart is a float chart, and its origins go back to W.D. Gann’s book, Truth Of The Stock Tape, originally published in 1923.
Price is king. Volume is queen. Both live in the context of time. But is there a prince or prime minister who has been overlooked? Float charts may have the answer.
In my 1996 STOCKS & COMMODITIES article, I introduced the cumulative volume float indicator and In demonstrated a dynamic relationship between a stock’s price and volume and its floating supply of shares. The idea was simple: by adding up volume cumulatively on a chart, we can identify rectangles that correspond with areas of accumulation at the bottom and distribution at the top. Since then, I have come to realize that what I discovered was not just a new indicator but an entirely new type of stock chart.
To understand, consider this question: What data goes into creating a stock chart? Price and volume. Is there a piece of data that stock charts have not been using? If the historical pantheon of charting begins with candlesticks, then goes to point and figure, then moves on to price & volume, I would ask: Is there a fourth way of charting stocks? Is there an overlooked piece of data which, when used properly, actually creates a new type of stock chart? Is there a new way to look at what is happening in a stock’s trading history? Yes! The missing data is the float number. The new type of chart is a float chart, and its origins go back to W.D. Gann’s book, Truth Of The Stock Tape, originally published in 1923.
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