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(More customer reviews)The author uses inexpensive off-the-shelf software to slice each trading day of a stock into one-minute segments. He finds the average one-minute volume for the day and separates the minutes into those with above or below average volume. In each group, he adds up the volume of minutes with rising prices and subtracts the volume of minutes with falling prices. This gives him two cumulative volume lines: one for the minutes with above average and the other for below average volume. He named them Large and Small Effective Volume.
The minutes with above average volume reflect the impact of the big money and often have predictive value. When you find a condition in which the big money starts pushing up a stock, while the small money remains negative or neutral, an upside reversal is in the cards. When the big money starts pushing the stock down while the small money is flat or buying, a downside reversal is more likely.
The author introduces another key concept which he calls Active Boundaries. When the returns from a stock over a period of time reach their upper boundary, the expectations for a further rise diminish and a downside reversal is more likely. When a stock declines and hits its lower Active Boundary, bullish expectations become high and the stock has a greater probability of an upside reversal. Numerous charts show how to catch reversals using these concepts.
In addition to Effective Volume and Active Boundaries the author describes several other concepts. He has a very rare ability to stand apart of the crowd, to question accepted concepts, and to come up with new ideas.
In the interest of full disclosure: I met Pascal a couple of years ago while working on my book Entries & Exits (John Wiley & Sons, 2005), which includes a chapter on his approach.
During the past year I have been receiving Pascal's analytic emails in which he shares his research into current markets. After you read this book, I suggest you write to Pascal and ask to be added to his mailing list!
I expect the concepts of Effective Volume, Active Boundaries, and others in this book to become accepted by many serious traders. As always, the early adopters will reap the greatest rewards.
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The "decimalization" of financial markets, has killed market visibility and, some believe, encouraged price manipulation. The only way investors and traders can now avoid becoming victims of insiders and manipulators is to use techniques that detect their moves. In Value in Time, Pascal Willain provides breakthrough new technical analysis tools that show you how to see through market manipulations and become a better, smarter trader. This unique guide contains insights that will take your trading to the next level.
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