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Value in Time: Better Trading through Effective Volume

Value in Time: Better Trading through Effective Volume

Pascal Willain

ISBN: 978-1-119-19661-7 October 2015 386 Pages


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.

Foreword xi

Acknowledgments xiii

Introduction: Revolution Is at Your Doorstep 1

PART ONE The Set of Tools That Will Change Technical Analysis 9

CHAPTER 1 Effective Volume: An Open Window into the Market 11

Traders Get a Secret New Tool: A Brief Introduction to the Trading Mechanisms and the Market Players 14

Volume That Moves the Markets 20

Effective Volume 30

Practical Examples of Effective Volume Calculations 40

Technical Section: How to Calculate the Separation Volume 51

Improve Your Trading: Decide on the Big Picture 57

A Comparison with Traditional Tools 59

What We Learned Regarding Effective Volume 66

CHAPTER 2 Price and Value: The Active Boundaries Indicator 67

Buy Low 67

Traditional Measure of “Cheap" 69

Why Do Trends Exist? 81

Grandmothers Are Always Right! 101

For Math Lovers: How to Calculate the Active Boundaries 109

What We Learned Regarding Active Boundaries 110

CHAPTER 3 When Volume Diverges from Price 113

Effective Volume: Two Arrows from One Bow 114

Price and Effective Volume Trends 118

Price-Volume Divergence Analysis 134

Examples of Divergence Analysis 144

How to Set the Optimal Analysis Window 176

Empty Trading Minutes 181

What We Learned Regarding Divergence Analysis 183

CHAPTER 4 Supply and Demand: The Key to Trading 185

Supply/Demand Equilibrium 186

Funds’ Strategies 205

Funds and Market Manipulation 211

What We Learned Regarding the Supply Analysis 218

PART TWO Trading Strategies 219

CHAPTER 5 Performance: The Risk/Return Balance 221

The Trading Strategy 223

Optimizing Profits 226

Minimizing Risks 245

Measures of Risk-Adjusted Performance: The Sharpe and Burke Ratios 260

What We Learned in This Chapter 262

CHAPTER 6 Automated Trading Systems 265

Production of Trading Signals 268

Trading Strategies 274

What We Learned in This Chapter 317

PART THREE The Bonus Section 319

CHAPTER 7 The Market Is a Two-Way Street: Shorting Strategies 321

The Short Sale “Tick Test” Rule 321

How to Use This Book’s Tools for Short Trading 322

What We Learned in This Chapter 340

CHAPTER 8 Market and Sector Analysis 341

When Is the Market Becoming Expensive? 342

Sector Analysis 350

What We Learned in This Chapter 361

Conclusion 363

Data Providers 371

Sources 373

About the Author 375

Index 377