Google site search Follow readtheticker on LindedIn YouTube StockTwits Follow readtheticker on Twitter


Search the content of this page:
Titles Only
Titles and Content

1. Jesse Livermores Secret To Success

2. Home page investor image explanation

3. The great crash 1929

4. Dear NewBie Investor

5. How Wall Street works

6. How to win in the stock market

7. Commandments to follow

8. 10 Rules for Investing

9. How to survive a stock market crash

10. William J ONeil, CANSLIM

11. Barry Ritholtz keep it simple stupid

12. Gerald Loeb how to win

13. Paul Tudor Jones II

14. Felix Zulauf

15. Sir John Templton

16. Warren Buffett

17. Reading the tape

18. Indicators Introduction

19. Richard Ney method

20. Richard Wyckoff method

21. Richard Wyckoff Waves of Price and Volume

22. Richard Wyckoff is a success story

23. Richard Wyckoff logic not working, this maybe why?

24. Richard Wyckoff studied Jesse Livermore

25. Bob Evans, renowned Wyckoff teacher

26. Tim Ord, Secret Science of Price and Volume

27. William Gann method

28. William Gann life story

29. William Gann Law of Vibration

30. Jim Hurst method

31. Wyckoff method improved1

32. Wyckoff method improved2

33. Original Wyckoff and Wyckoff 2.0

34. Wyckoff 2.0 vs Others

35. Wyckoff 2.0 and Volume Spread Analysis

36. Powerful Patterns

37. Elliot Waves

38. Price Action

39. Market Statistics

40. Cycles for short term speculation

41. Stop Loss methods

42. Alpha Stock Scanner

43. Swing Scanner

44. Flash Charts

45. RTT Market Timer

46. RTT Wyckoff Short Term model

47. Chart Drawing Tools

48. Standard Indicators

49. Proprietary Indicators (PI)

50. Multi Time Frame (PI)

51. PI: RTT TrendStatus

52. PI: RTT Squeeze

53. PI: RTT TrendPower OBV

54. PI: RTT On Balance Volume

55. PI: RTT VolumeWave

56. PI: RTT Rainbow Bands

57. PI: RTT Volume

58. PI: RTT MarketPulse

59. PI: RTT Steps of Cause and Effect

60. PI: RTT Wyckoff Strength Weakness

61. PI: RTT Wyckoff Price Waves

62. PI: Proprietary Indicators Caution

63. What we do - 1st

64. What we do - 2nd



         



Indicator Library
PI: RTT TrendPower OBV
RTTTrendPowerOBV and RTTTrendPowerOBVBase is a proprietary indicator, part of the RTT Indicator set.

Important Disclaimer: None of the proprietary indicators give specific signals of BUY and/or SELL prices or signals for investment decisions. They do however bring your attention to price action for further analysis only. Any BUY or SELL decision is purely your own responsibility. Please understand that we find favor with our proprietary tools, but they do not work all the time, nothing is 100% accurate. Please review our terms of use.

The RTT TrendPower responds to bullish and bearish price action weighted by volume. Many have called this type of indicator a 'smart money tracker' or 'bull bear', in the end it is simply a 'true trend' indicator as price direction is weighted by volume.

The calculation from each days high, low, close and volume.
Bar Mid Point (BMP): (High+Low)/2.
Bullish Close: When close is above BMP.
Bearish Close: When close is below BMP.
Neutral Close: When close is equal to BMP.
The above is then weighted by volume, and then added to the previous bar result.

The output is:
1) When price closes well above the BMP, with good volume, the indicator will move higher.
2) When price closes well above the BMP, with poor volume, the indicator may or may not move higher.
3) When price closes slightly above BMP, with good volume, the indicator will move mildly higher.
4) When price closes slightly above BMP, with poor volume, the indicator may or may not move higher.
5) When price closes well below the BMP, with good volume, the indicator will move lower.
6) When price closes well below the BMP, with poor volume, the indicator may or may not move lower.
7) When price closes slightly below BMP, with good volume, the indicator will move mildly lower.
8) When price closes slightly below BMP, with poor volume, the indicator may or may not move lower.

If you are a student of Richard Wyckoff you will recognize that this indicator supports the tape reading law that a healthy uptrend trend requires rising volume on the upswing and falling volume on the down swings as price makes higher highs and higher lows (vice versa for down trends).

This indicator highlights buying and selling pressure, buying pressure can be seen when there is increased volume with frequent closes in the top half of the bar range and selling pressure can be seen when there is increased volume and with frequent closes in the bottom half of the bar range.

This indicator is ideal to judge the price trend power after a break out through support or resistance. This indicator is not a signal tool for buy and sell decisions, price action should guide you there, however if this indicator shows weakness or divergence then your stops should be tightened.

How to read the indicator:
1) Bullish: When indicator breaks zero or is above zero or is rising higher or maintaining a constant level above zero (like a channel).
2) Bearish: When indicator breaks zero or is below zero or is falling lower or maintaining a constant level below zero (like a channel).
3) Use a trendline on the indicator swings as a 'heads up' to a change in behavior.
4) Divergence with indicator peaks and troughs compared to price peaks and troughs is material.
5) Understanding Wyckoffian logic (low, average and extreme volume, supply and demand, composite man, market phase, weak and strong hands, mark up, mark down) is essential to interpreting the correct market message from this indicator.*

*Please read the book by Tom Williams 'Master The Markets', see our education page for more, and all other related Wyckoff books.

Trend Change
If you expect price to undergo a trend change then you will require this indicator to move from bearish to bullish (or vice versa). In most cases this will involve the indicator crossing and testing the zero line, and or breaking a short term trendline pattern within the indicator.

Hurst Cycles and Gann Angles
The health of a trend (or change of) is of great interest to the cycles analyst. If you expect price to roll over in line with a cycle, then you should see a confirmation via this indicator. If the indicator does not confirm the cycle rollover then it may be confirming a cycle inversion. The same applies to angles, if you expect to see price bounce off an angle then you should see a confirmation via this indicator, other wise a angle break may be confirmed.

Wyckoffian Logic
Wyckoff students know that price moving with average volume is best, and low or extreme volume can lead to price reversals. As this indicator is weighted by volume, extreme volume readings will accelerate this indicator in either direction, therefore you can conclude that very fast movements by this indicator should be considered the same way as Wyckoffian logic treats extreme volume, with due care.

Consider this, a markup bar is a bar that is wide in range, supported by good volume and the close is near the high. However this type of bar can have two consequences, the first that if it is true demand by the strong hands (ie composite man), and higher prices are to be expected, the second is that if it is false demand, by either the weaker hands who are mistaken about the trend, or it is a pump up by the strong hands to fool the weaker hands so they can sell into it. The point is that a mark up bar requires confirmation by the immediate bars that follow it. This indicator will rise over time with the markup bars that are true, and fall when markup bars are false. A strong bullish trend, has many true mark up bars, thus when this indicator is trending well or maintains a decent elevation above zero the price trend is true and well supported by the strong hands (to cover mark down bars is the inverse of this paragraph).

This indicator will be useless to you if you do not understand Wyckoffian logic, start your true stock market education and learn as much as you can about Wyckoffian Logic. You will find our favorite books on the subject listed under the 'Richard Wyckoff Method'. Unfortunately not a single book covers all of the Wyckoffian logic aspects in total, you need to read them all, and then you will know as much as we do.

Richard Wyckoff used an indicator called the optimism and pessimism index which is very similar to RTTTrendPower, both are price action adjusted by volume action.

See more here :
A indicator that Richard Wyckoff would add to his tool chest
Citigroup and Toyota review

RTT TrendStatus
The RTT TrendStatus is calculated purely on price, it is NOT the volume weighted, and therefore viewing the RTT Trendstatus with RTT TrendPower will help you determine how powerful the price trend with volume is. Remember, that price action has priority over volume, price action leads, but for price to maintain its desired trend it will eventually require volume to confirm it.

Period Setting
The default setting is 21. If you are using it with Hurst Cycles then use the half cycle period (ie Hurst Cycle is 80, use this indicator with 40 periods.). The period selected sets the average volume time span that the current day volume is compared to, therefore viewing a stock with 11, 21,81 and 121 periods (half a month, one month, four months, six months) will give a better picture of the stock true trend (or trend power). If you trade shorter time frames settings of 7 to 12 will give you an excellent view of the immediate bull or bear focus.

Volume Data
As this indicator is weighted by volume, low volume stocks may not produce the best readings. Take due care.

Examples

Click for popup. Clear your browser cache if image is not showing.
SPY RTT TrendPower


Click for popup. Clear your browser cache if image is not showing.
DBA RTT TrendPower


Click for popup. Clear your browser cache if image is not showing.
AAPL trendPower

Click for popup. Clear your browser cache if image is not showing.
SPY TrendPower Periods

And also RTTTrendPower merged with the standard On Balance Volume (OBV) indicator produces are great price volume trend check.

Click for popup. Clear your browser cache if image is not showing.
RTTTrendPowerOBV

Here is an important indicator RTTTrendPowerOBVBase (now named RTTWyckoffNeyVolume), this is a internal calculation from within RTTTrendPowerOBV. Evaluate the red and blue volume bars using Richard Wyckoff Law of 'Effort vs Results'.

Click for popup. Clear your browser cache if image is not showing.
RTTTrendPowerOBVBase



Divider




NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net

Investing Quote...

.."Every movement in the market is the result of a natural law and of a Cause which exists long before the Effect takes place and can be determined years in advance. The future is but a repetition of the past, as the Bible plainly states"..

William D Gann


My experience has been that in successful businesses and fund management companies, which performed well over the long-term, some courageous decisions were taken. Courageous fund managers reduce their positions when markets become frothy and accumulate equities when economic and social conditions are dire. They avoid the most popular sectors, which are therefore over-valued, and invest in neglected sectors because being neglected by investors they are by definition inexpensive. The point is that it is very hard and that it takes a lot of courage for a fund manager to avoid the most popular sectors and stocks and to invest in unloved assets. Finally, every investor understands the principle ‘buy low and sell high’, but when prices are low nobody wants to buy.

Marc Faber




..“Investing should be like watching paint dry or watching grass grow. If you want excitement…go to Las Vegas.”...

Paul Samuelson


.."It's easier to fool people, than to convince them they have been fooled"..

Mark Twain


.."Money couldn't buy friends, but you got a better class of enemy"..

Spike Milligan




Created on: 5/4/2011 1:57:38 AM   Last Update: 9/30/2020 10:01:00 PM Posted by: RTT
         >> Print or PopOut or Pdf .

We at readtheticker.com hold the view that a mix of stock chart technical analysis, Richard Wyckoff, William Gann and Jim Hurst methods plus market fundamentals allows the investor to formulate a very sound market opinion. These attributes are mutually inclusive and must be weighted equally before investing or trading in any Stock, ETF, Currency, Bond, Commodity, CFD or Mutual Fund



Home | Charts & Tutorials | Market Timing | Blog | RTT Tv | Services | Information & FAQ | Contact Us | Sign Up | Logon
Indicator Library | FAQ | Site Search | Symbols Available | Education | Advisors | General Policy | Privacy Policy | Terms Of Use | About Us
Tutorials | Charts Demo | Charts Members | Charts Secured | Mobile Site | Market News | Investment Quotes | World Time .
Public Disclaimer




Follow readtheticker on LindedIn