martinkv

First let me thank you for your post on price volume relationship. To put my story short, for the past 11 years I have been developing and fine tuning my own technical indicator, closely related to volume. I had gone through lot of info about indicators and stock market in general and consider myself an amateur trader. Ultimately when my indicator was ready, I found to my utter dismay that it was showing seemingly random patterns. Recently when I was about to give up my efforts, I chanced upon your statement “If Volume is increasing, then the Price Trend is continuing” hit me as simplistic but then later I realized the truth of the saying “All great truths have a simplicity to them.” I made some changes to my tool (written in c++ and c#) and tried to decipher the indicator based on your rule. To my amazement I found that my indicator was actually predicting the market! Your rule is to free market dynamics what Newton’s law’s of motion is to classical physics. That rule hit me out of the darkness like lightning. I don’t know much about fractals but if you gave the rule some though you would understand that it defines a fundamental behavior of any free market, driven by supply and demand. If you find a scenario in which the rule is not working I would be bold enough to say that there is something fundamentally flawed within the system. During my detailed analysis of the indicator using your rule I discovered a corollary to your rule. “If the volume is decreasing the trend may reverse.” Once again thanking you for the tremendous insight your post provided me. It would be a great help if you could post more about fractal basics and maybe give a blueprint on how to make a technical indicator based on fractals. Martin.