The Supply Tool related improvements
I have published in the link below the detailed structure of the Supply model.
The only thing of importance is that you need to recognize that when the price of a stock falls below the Neutral Boundary (NB) level the selling accentuates due to stop losses. However, when the price falls close to the NB without breaking too much below it, then the price might bounce since few people want to sell at a break-even point.
http://www.effectivevolume.com/conte...al-time-system
The Supply method has been explained in Ch 4 of the VIT book.
Below is the results of a back-test that I published in Ch 6 of the book.
This back-test shows that
- Buying at a low supply gives better returns than a simple Buy/Hold method.
- The lower the supply the better the return.
- The combination of the Supply tool to the LER tool offers still better returns.
(LER stands for Large Effective Ratio, which is the Large Effective Volume to the total volume ratio. It is a normalized way to measure the LEV and consequently compare it to past accumulations)
Since the Supply tool works better in combination to LER, I started to publish the Supply/LER combination in the "Supply" sheet on the PascalA repository file, which can be found here.
The "Stocks" section of the repository file now includes the Supply level for each stock.
I have also added in the Filters section two links that show the EV/AB Figures of the stocks that either have low supply/High LER or High Supply/Low LER patterns.
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