I am interested to learn more about this method of TA and have read Richard Arms's book (but I cannot remember the title ). :huh:

I noticed that HC has occasionally used this method of TA. My questions are:

In Metastock,

1. For the Vol Adjusted MA, should I use the Close or Median Prices?
2. For the Ease of Movement indicator, should I use "Simple" or "Vol Adjusted"?
3. Why is it that sometimes the EoM is totally flat on the zero line?
4. Anyone knows where to get the necessary info to plot the Arms Index?

I know sg.finance.yahoo.com has the info for (4) but their figures seem a bit weird because the total no of stocks go up and down on different days.

Lastly, does anyone know where I can find the numbers for new highs and new lows?

Thanks in advance.

Imm88:

I only can answer your first question "For the Vol Adjusted MA, should I use the Close or Median Prices?"

I use the closing price. I think you can explore using median price and see if it is better (visually or do a system test).

I don't use Ease Of Movement and Arms Index, so I was unable to help here. So is the number of new highs and new lows.

But come to think about it, unless your data provider do processing and update them as a separate data file, you won't be able to get Arm Index and number of new highs and new lows. I just wonder which data provider will do that processing for you.

I think if you die die must get these info, you can use Metastock explorations to scan the whole exchange, then export those report to Excel for more manipulation, extract the result, save in csv format, convert back to Metastock format for charting. But I doubt it is worth your time to doing it, leave alone doing it every day.

2. For the Ease of Movement indicator, should I use "Simple" or "Vol Adjusted"?

Don't know what effect the options "Simple" and "Vol Adjusted" in MetaStock have on the calculation. This is the generic formula:

3. Why is it that sometimes the EoM is totally flat on the zero line?

The formula for EoM is MidpointMove/BoxRatio. Possible reasons could be:

a - The numerator, MidPointMove is zero or very small
b - The denominator, BoxRatio is very big, for example penny stock charateristic of big volume but small DayRange.
c - The calculation result is not padded for better presentation. The same reason padded bra is invented. :blink:


4. Anyone knows where to get the necessary info to plot the Arms Index?

The formula is:

Arms Index = (# of advancing issues / # of declining issues) / (advancing volume/declining volume)

The information is made available on a daily basis in the Straits Times, Yahoo! Finance or some websites. There is no publicly available historical data other than the subscription realtime vendors. Otherwise this information can be derived from the daily file from SGX. You need to parse the file daily.

Do note that there is no consistency in the final production of these numbers. Some providers may include the company-issued warrants and some may include the structured warrants. Since structured warrants issuers tend to issue call warrants only and usually concentrate on more popular stocks, upmoves are amplified. Also note that Put warrants advance when the mother share decline. Similarly for company-issued warrants. An advancing stock also result in advancing warrant. So do you want to count double, triple, multiple?

All your work may not bear fruits because the Arms Index may not be practical for SGX. In the US where the Arms Index began, if the price of a stock stay below US$1 for a few (can't remember but I think is 2) months, it risks being delisted by the exchange. This is strict rule. Whereas on SGX there are a lot of low price stocks that stay low price perpectually. And companies tend to use tricks of bonus and splits to keep them low for marketability. Low price stocks tend to have very big volume than high price stocks. The formula then produce unreliable readings.

In programming parlance, garbage in garbage out.

HC, csk

Thank you both for your replies.

I was curious about this method of TA, especially having read the book by Richard Arms. Tried to plot it in Metastock and ended up quite frustrated. :huh:

I really appreciate you guys for taking the time to reply and share your knowledge. I am very keen on TA, but still have a long way to go before I can say that I am confident about my reading of the charts.

I enjoy reading the TA/Charts section because there, at least, I can get a SG perspective whereas in books, the attention tends to be on the US markets.

:D