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Woods Float Analysis Toolkit

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Our Price: $695.00
 
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Tradestation

Description:

This Tool Kit provides the user with the tools necessary for analyzing stock behavior based upon a revolutionary concept developed by Steve Woods and described in his new book, The Precision Profit Float Indicator. (MarketPlace Books, 2000). This set of powerful techniques to exploit price and volume is described more fully at Steve's web site:
http://www.floatanalysis.com.

 

Woods CVF - 2.jpg (82495 bytes)

The floating supply of shares--or simply, float-- is all the shares actually available for trading by the public that are not owned by the company's management. This number can be incorporated into an understanding of the direct relationship between the stock price and its volume of shares traded. This is easily seen when a backward cumulative count of the volume is studied in relation to a stock's floating supply of shares. What emerges from this analysis are price-volume patterns that clearly show stocks forming bottoms, bases in a rising trend, and tops, as well as giving buy and sell signals. To understand this relationship between price and volume and see its powerful implications, we must first define our terms.

The turnover of the float is the approximate time it takes for the float to change ownership. For example, if a stock's float has 50 million shares actively trading and the volume for the last four weeks was exactly 50 million shares, then the float's turnover would be a four-week span starting from the current date and going back to the day when a cumulative total of the volume equaled 50 million shares.

Note that the turnover of the float is a hypothetical term and not precise. We can never know exactly when a complete turnover of shares traded has occurred because we cannot know the intentions of the market participants. Some long-term investors may hold onto a stock through any and all circumstances, while some short-term traders may buy and sell several times during the time it takes for the float to go through one hypothetical turnover. This does not deter us from analyzing the turnover of the float, however, because the patterns that arise from such a study show up so often and speak loudly and clearly for themselves.

Woods Cumulative Volume-Float Indicator

Here's how the Woods Cumulative Volume-Float Indicator works. The float is a variable input value that must be entered for each different stock under consideration. Starting on any given day and working backward, the current day's volume is added to the previous day's volume and adds that to the next previous day's volume and so on. As each volume number from the past is added cumulatively, the computer compares the running total with that particular stock's float. When the cumulative total is equal to or greater than the float, a dot is placed above that particular bar on the chart.

Then two horizontal lines are plotted on the chart. The top line shows the highest price reached during the backward count, and the bottom line, the lowest price. These lines serve as trigger lines for the buy and sell signals. When the stock price goes through the top line it gives a buy signal, and when it goes through the bottom line it gives a sell signal. The lines extend backward from the starting date to the bar, where the float has gone through one complete turnover.

Some stocks with a small float may take months or years to go through one complete turnover, while other stocks with large floats may have a rapid turnover in a matter of days.

The program is set up to start counting backward from any date entered for historical studies or set for the present date form constant updates. If a stock's price is rising day after day, the program gives buy signals each time the price goes through the line set from the previous day's highest price reached.

The indicator has five inputs, as follows:

FLOT: This is the number representing the outstanding number of floating shares.

START: This is the starting date from which the volume is cumulated backwards. The default value of "CurrentDate" will cause the indicator to update the values at the end of each trading day. If you wish to start the calculation at an earlier date, enter the date here in the YYYMMDD format (e.g. 1000202).

HIALERT: When set to "True", will display the upper line (highest high) of the congestion range and activate the upper line breakout alert. The alert will sound the first time price breaks above the upper channel boundary. It will not sound again until price has consolidated with a cumulative volume since the last upper channel boundary breakout of at least 75% of the Float.

LOALERT: When set to "True", will display the lower line (lowest low) of the congestion range and activate the lower line breakout alert. The alert will sound the first time price breaks below the lower channel boundary. It will not sound again until price has consolidated with a cumulative volume since the last lower channel boundary breakout of at least 75% of the Float.

NMAX: This is the maximum number of bars back that the system will look at before calling it quits. It serves as an escape hatch to avoid getting trapped in an endless loop. If no plot appears on the chart when this indicator is activated, it is probably because the number of bars back to accumulate the Float volume exceeds NMAX. If NMAX is set to a number of bars less than the distance from the Start Date back to the Float Point, the study will not plot.

 

Woods Cumulative-Volume "Historical" Float Indicator

Woods Historical CVF 1.jpg (105708 bytes)

This indicator is excellent for showing how a stock has behaved in the past in relation to the turnover of its float. It is a great tool for those who are studying Float Analysis to find possible profitable patterns. This indicator plots a continuous channel representing for each successive bar the highest and lowest prices reached over a period of time extending back from the current bar to the Float Point relating to that current bar. (The "Float Point" is that point in past time where the cumulative volume from that point to the current bar equals a manually-inputted value referred to as FLOT. "Float" is a reserved programming word, so instead we call this variable "FLOT").

This indicator permits a continuous evaluation of how the cumulative volume/float relationships change with time.

Inputs include the following:

FLOT -- The number of outstanding shares actually available for trading for the stock being analyzed.

ALERTPCT - When set to 85, for example, will issue an alert when the price reaches 85% of the float high line price or float low line price.

HIALERT: When set to "True", will display the upper line (highest high) of the congestion range and activate the upper line breakout alert. The alert will sound the first time price breaks above the upper channel boundary. It will not sound again until price has consolidated with a cumulative volume since the last upper channel boundary breakout of at least 75% of the Float.

LOALERT: When set to "True", will display the lower line (lowest low) of the congestion range and activate the lower line breakout alert. The alert will sound the first time price breaks below the lower channel boundary. It will not sound again until price has consolidated with a cumulative volume since the last lower channel boundary breakout of at least 75% of the Float.

NMAX: This is the maximum number of bars back that the system will look at before calling it quits. It serves as an escape hatch to avoid getting trapped in an endless loop. If no plot appears on the chart when this indicator is activated, it is probably because the number of bars back to accumulate the Float volume exceeds NMAX. If NMAX is set to a number of bars less than the distance from the Start Date back to the Float Point, the study will not plot.

 

Woods Cumulative-Volume "Percentage" Float Indicator

This study is useful in illustrating how much of the float volume has been consumed over a selected period of time and to trigger an alert when one complete float turnover has occurred since the selected starting date.

This tool is fantastic at alerting you to price reversals. Research of stocks making fast runs to the upside has shown that price reversals often occur after 100 % of the float has traded hands. The indicator creates a histogram that tracks the percentage of the float that has traded from any given date. It gives an alert when 100% (or any percent you request) of the float has traded. It is used primarily to measure price "extensions".

Horizontal reference lines can be plotted on the study showing the 50% of float point ("MidPct") and the 100% float point. The maximum point on the indicator ("StopPct") can be set at any percentage (e.g., 100%, 150%, 200%, 300%.)

Inputs include the following:
FLOT(9999999), {Number of shares in Float}
START(1000101), {Starting date for Cumulative % Float calculation}
NMAX(200), {The maximum number of bars back that the system will look at before calling it quits}
STOPPCT(100), {The percentage value at which the indicator stops plotting}
HIALERT(100), {The percentage value at which the HIALERT alert is triggered}
MIDPCT(50); {The value of the progress percentage line }

Woods FloatAnalysis Indicators.jpg (109562 bytes)

Woods "Lazy S" Float Indicator

This indicator searches for a "Lazy S" pattern that has been demonstrated to be quite bullish. The "Lazy S" pattern has a stock's price giving a buy signal on the second pullback following two strong rallies. Each rally is on strong volume and each pullback is on decreasing volume. This action occurs within the turnover of the float. The buy signal occurs when the pullback price is within 15% of the price reached in the first rally peak. We call this a Lazy "S" Pattern, because it looks like an "S" lying on its side. When the pattern is detected the indicator gives an alert signal and the swing highs and lows of the pattern are highlighted.

The study contains two input values useful in defining the size of swings needed to trigger the signal. These are called, TICKCHG and PCTCHG, respectively. These two inputs are complementary, and one or the other must always be set to zero. If TICKCHG is set to 0 and PCTCHG is set to 1, for example, a reversal in price of at least 1 percent from the most recent high or low is required to define it as a new swing high or low. Fractional percentages are acceptable.

If PCTCHG is set to 0 and TICKCHG is set to 5, on the other hand, a reversal in price of at least 5 points from the most recent high or low is required to define it as a new swing high or low. Thus, by adjusting the value of TICKCHG or PCTCHG the user can adjust the sensitivity of the indicator.

An input, INCR is also included. This represents a price increment that can be added or subtracted from the final leg to qualify it as a valid Lazy "S". If you input an INCR value of 2, for example, the price must come down past the first peak by 2 points to qualify. If INCR is set to -2, then the signal will be generated 2 ticks shy of reaching the first peak level. This gives the user some further leeway in adjusting the sensitivity of the indicator.

 

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Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

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