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Flow of Money

Hi,

I would like to know if there is a way for members of stockcharts.com to track the flow of money in and out of an asset ie. individual stock, sector etf or asset class

Any help is much appreciated.

Thanks!

Jason

Comments

  • markdmarkd mod
    edited July 2015
    There are several indicators that use volume and price to guesstimate the flow of money in and out of a stock. Their calculations differ and their usefulness varies in different markets. You might want to play with the parameters where that is an option to fit your time frame. These are all explained extensively in Chart School under technical indicators:

    VWAP - volume weighted average price
    Accumulation/Distribution line
    Chaiken Money Flow
    Chaiken Oscillator
    Force Index
    Money Flow Index
    Negative Volume Index
    On Balance Volume

    My personal preference is Force Index with various parameters corresponding to calendar periods - on the daily chart - 251 (annual), 63 (quarterly), 21(monthly), each with an MA one time frame down (63, 21, 5). These are not conventional settings, but they seem to be pretty good for showing accumulation and distribution for the selected period.

    Divergences in the direction of the MAs with corresponding price MAs (for example, the 63MA of Force trending up while the 63MA of price still trending down) and local divergences between price and the index itself are often useful parts of setups (in other words, not triggers, but conditions that improve the odds).

    I like Force because the calculation seems best suited to the purpose, but all of the others have their advocates and are worth looking into as well.
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