Hi Ali,


I developed the EV method in the year 2000 when the equities pricing came down from 0.16$ increments to 0.01$ increments. This moved the trading pattern from a queue driven book to a liquidity driven book.
This allowed funds to develop trading algos that could detect liquidity and drip release their own orders in order to have their orders executed within the existing liquidity.

EV has been developed in order to be able to reconstruct the original orders before they were cut into tiny slices to be fed to the market. Hence, EV restores market visibility that the queuing method originally offered.

If you come back to a queue driven market like it is the case in Iran, the EV method is not reliable anymore. The EV method needs liquid markets with many participants.

On the opposite, if you only have one very large participant such as the Fed liquidity provider, then the EV method will mainly detect that participant's activities. This is what has been taking place in the current market since the end of February.




Pascal