tekolo

Bill Williams Volume and MFI notation [tekolo]

Bill Williams Profitunity

The Bill Williams Profitunity provides a unique way of quantifying price movement relative to volume .
At the heart of it is the Market Facilatation Index ( MFI ). The MFI is the bar's range (high - low)
divided by the volume . Using the MFI , each bar has a mathematical relationship of the price activity
versus the volume . In essence, the MFI is a measurement of market efficiency, tracking how much
movement has occurred in price relative to volume . By comparing the MFI for the current bar to the
previous bar's, you can gauge the current bar's ability to facilitate price to the previous bar's
ability . The Bill Williams Profitunity can be used on any period from daily bars to monthly bars.

The MFI as a stand-alone indicator has little value. However, by comparing the current bar's MFI and
volume with the previous bar's MFI and volume , a very tradable system emerges.

Williams defines the four possible combinations of MFI and volume as follows. A plus sign means the
current bar's value is greater than the previous bar's value. A minus sign means the current bar's
value is less than the previous bar's value.

Volume MFI Label:
Green
Fade
Fake
Squat

Green. This bar shows an increase in volume and the MFI relative to the previous bar. Hence, there is
price movement, and the MFI is larger for this bar than that for the previous bar. Further, more
players are entering the market as signaled by the increase in volume . This activity in the futures
market means that off-floor traders are very active. In addition, the price action is directional
that is, the market is moving in one direction due to the involvement of new traders putting on new
positions. This is the kind of day that you would already want to have a trade on in the same direction.

Fade. This bar shows a decrease in volume and the MFI relative to the previous bar. The market has slowed
and there is a minor amount of activity as indicated by the low volume . This type of day is called a fade,
as the traders' interest in the market by this point is fading. Often, this sort of day happens at the end
of a trend. The market has simply reached a point where nobody is willing to establish any new positions.
At this point the market appears to be suffering from a certain amount of boredom. Keep in mind, however,
that out of this market condition, a new trend could emerge.

Fake. This bar shows a decrease in volume but an increase in the MFI . This condition means that the market
is moving more relative to the previous bar (the greater MFI ), but the lack of volume is evidence that there
is no new participation. The price action may be driven by just the traders in the pit and is not attracting
new players from the outside. Williams has an hypothesis, that the traders in the pit may be just strong enough
to push the market to price levels where there are many stop orders resting in the hands of the brokers, hence
faking out the off-floor traders.

Squat. This bar shows an increase in volume relative to the previous bar, but the MFI is lower. The increase
in volume indicates heavy activity, but the decrease in the MFI indicates that the market is unable to make
any real headway. Volume increased, the trend has stalled and the price movement has stopped. This price action
usually, but not always occurs prior to an important move in the opposite direction. This type of bar is called
a squat bar because the market appears to be squatting prior to a breakout. Often, the breakout of such a bar will
indicate whether this squat is a trend reversal squat or a trend continuation squat.


Source: http://analyzerxl.com/webhelp/BulkQuotes...
More info: https://en.wikipedia.org/wiki/Market_fac...
Mar 19
ملاحظات الأخبار: Bill Williams Profitunity

The Bill Williams Profitunity provides a unique way of quantifying price movement relative to volume.
At the heart of it is the Market Facilatation Index (MFI). The MFI is the bar's range (high - low)
divided by the volume. Using the MFI, each bar has a mathematical relationship of the price activity
versus the volume. In essence, the MFI is a measurement of market efficiency, tracking how much
movement has occurred in price relative to volume. By comparing the MFI for the current bar to the
previous bar's, you can gauge the current bar's ability to facilitate price to the previous bar's
ability. The Bill Williams Profitunity can be used on any period from daily bars to monthly bars.

The MFI as a stand-alone indicator has little value. However, by comparing the current bar's MFI and
volume with the previous bar's MFI and volume, a very tradable system emerges.

Williams defines the four possible combinations of MFI and volume as follows. A plus sign means the
current bar's value is greater than the previous bar's value. A minus sign means the current bar's
value is less than the previous bar's value.

Volume MFI Label:
Green
Fade
Fake
Squat

Green. This bar shows an increase in volume and the MFI relative to the previous bar. Hence, there is
price movement, and the MFI is larger for this bar than that for the previous bar. Further, more
players are entering the market as signaled by the increase in volume. This activity in the futures
market means that off-floor traders are very active. In addition, the price action is directional
that is, the market is moving in one direction due to the involvement of new traders putting on new
positions. This is the kind of day that you would already want to have a trade on in the same direction.

Fade. This bar shows a decrease in volume and the MFI relative to the previous bar. The market has slowed
and there is a minor amount of activity as indicated by the low volume. This type of day is called a fade,
as the traders' interest in the market by this point is fading. Often, this sort of day happens at the end
of a trend. The market has simply reached a point where nobody is willing to establish any new positions.
At this point the market appears to be suffering from a certain amount of boredom. Keep in mind, however,
that out of this market condition, a new trend could emerge.

Fake. This bar shows a decrease in volume but an increase in the MFI. This condition means that the market
is moving more relative to the previous bar (the greater MFI), but the lack of volume is evidence that there
is no new participation. The price action may be driven by just the traders in the pit and is not attracting
new players from the outside. Williams has an hypothesis, that the traders in the pit may be just strong enough
to push the market to price levels where there are many stop orders resting in the hands of the brokers, hence
faking out the off-floor traders.

Squat. This bar shows an increase in volume relative to the previous bar, but the MFI is lower. The increase
in volume indicates heavy activity, but the decrease in the MFI indicates that the market is unable to make
any real headway. Volume increased, the trend has stalled and the price movement has stopped. This price action
usually, but not always occurs prior to an important move in the opposite direction. This type of bar is called
a squat bar because the market appears to be squatting prior to a breakout. Often, the breakout of such a bar will
indicate whether this squat is a trend reversal squat or a trend continuation squat.


Source: http://analyzerxl.com/webhelp/BulkQuotes...
More info: https://en.wikipedia.org/wiki/Market_fac...
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@tekolo - Brilliant indicator, my friend! Any chance you could devote some of your time and talent do develop an indicator which could help us all with Angulation?

Many thanks!
رد
tekolo MRZSKV
@MRZSKV, Can you give me more information about? Thanks.
رد
MRZSKV tekolo
@tekolo, Angulation is described in the book Trading Chaos (2nd edition) in the chapter dedicated to the First Wise Man signal - the bullish/bearish divergent bar.
For this signal to be considered valid, the bar should be "angling away" from the Alligator mouth (from the jaw, in particular). There are a few pictures illustrating this but I'm not sure I can post them in this thread as it could be breaching copyright laws. I believe you'll be able to find some on the internet? Many thanks.
رد
tekolo MRZSKV
@MRZSKV, Do you have Trading Chaos (2nd edition)? Can you sharing me a link? If you prefer via private message.
رد
MRZSKV tekolo
@tekolo, send me a PM with your email address. Will send you the pdf through WeTransfer
رد
Fantastic, Tekolo! Having just studied "Trading Chaos," I was disappointed to learn Bill Williams and his daughter Justine no longer offer or support the Profitunity platform. Your script makes it possible for me to trade the way I want, using Williams' indicators. Thank you so much!
رد
tekolo RobJoseph
You're welcome, @RobJoseph. I would be very grateful to you if as a connoisseur of the strategy you will tell me about any possible improvements to be made in the indicator.
رد
@tekolo, You bet, T. I will be happy to. Let me work with it a bit more and if I have any good ideas, I will let you know.
رد
RobJoseph RobJoseph
@tekolo, One thing that I noticed is the on page 78 of "Trading Chaos," first edition, Bill Williams says he divides each bar into three sections from the top down, i.e., that an open in the top third is a "1" and an open in the bottom third is a "3". A close in the top third is a "1" and a finish in the bottom third is a "3". So a bar that starts in the top third and ends in the bottom third (i.e., a bar where the bears won) would be a "13", and a bar that starts at the bottom and moves up to the top third (i.e. a bullish bar) would be a "31". I think this is the opposite of how you have this set up. Thanks, Rob.
رد
ojpr RobJoseph
@RobJoseph, yeah i also notice that, but besides that, it its excellent indicator, and seem that the squats and greens are well configured 👍
رد
الصفحة الرئيسية منصة الأسهم منصًة العملات منصّة العملات الرقمية جدول الأعمال الاقتصادي برامج تعليمية كيف نعمل مميزات الرسم البياني أسعار العضوية قوانين الموقع المشرفون حلول المواقع الإلكترونية والوسطاء الأدوات حلول الرسوم البيانية مكتبة الرسوم البيانية صغيرة الحجم مركز المساعدة إحالة صديق طلب الخصائص المدوّنة والأخبار الأسئلة الأكثر شيوعًا معرفة تويتر
الملف الشخصي إعدادات الصفحة الشخصية الحساب وإعداد الفواتير إحالة صديق تذاكر الدعم الخاصة بي مركز المساعدة التحاليل المنشورة المتابعين تتابع رسالة خاصة المحادثة تسجيل الخروج