Scan/Exploration for identifying accumulation

[pavilion103]

I have virtually zero experience with coding and am not sure how to go about creating a scan that can identify accumulation. I realise this can't be anywhere near 100% accurate, but just something to draw my attention to ultra high volume moves into a low.

I'm thinking something like:
Moving Average of last 10 days > 3* Moving Average of last 40 days (for example) and then price below a moving average maybe?

The reason I post this is so that people can see I am at least making a genuine attempt to come up with ideas myself. Even if this is not even close.

If anyone has any suggestions to kick start me, as to paramaters that I could use, it would be much appreciated.

Thanks

 

[Billyb]

You can look for low price values eg lowest low in last 100 bars
Perhaps only consider if below a long-term price moving average
Combined with a high volume filter - probably a moving average of volume
Or wide ranging down bars which are common in accumulation
There are a ton of ideas

But they will all return a lot of rubbish and you will end up spending a lot of time filtering through it anyway. That's just what I think. You need eyeballs to spot accumulation not a computer. If you have a small manageable watchlist instead of a huge watchlist you will be able to monitor all your tickers and spot accumulation when it happens.

 

[Wysiwyg]

From these descriptions below I think range trading could be areas of stock accumulation (or distribution ) of which I can't yet define on a chart.

Descriptions of accumulation :-

"A price range in which buyers buy large numbers of shares of a stock. One can identify an accumulation area if a stock only rarely falls below a certain price. On-balance Volume Method analysts use accumulation areas to recommend stock purchases because they believe such stocks will attract large numbers of buyers."

"1. When an individual investor is attempting to build up the value of a portfolio, he or she is said to be accumulating wealth. The reinvestment of profits over the course of the investment time horizon can greatly boost the pace of accumulation through the benefits of compounding.

2. Large investors and financial institutions are limited in their ability to move in and out of securities because they deal with large numbers of shares that would drive the price of a security up if ordered all at once. In order to buy their intended number of shares, institutional investors spread their accumulation of shares over a period of time."

 

[peter2]

Consider the indicators Twigg's Money Flow (TMF > 0), OBV (rising)
There are other volume based indicators but these are the only two I have experience with.

Divergence between price and either of these two indicators is an indication of accumulation.
So also is more up days than down days when price is in a narrow range.

Fake-outs below support are good buy signals once accumulation takes out the current supply.

 

[Wysiwyg]

L. Williams Acc/Dist ?

http://www.mail-archive.com/amibroker@yahoogroups.com/msg17227.html

 

[pavilion103]

Thanks for the input guys.

I know that there is no substitute for visually identifying accumulation, but hopefully I can try out some of these ideas and see if it draws my attention to the types of stocks I would look at monitoring.

 

[Mistagear]

Thanks for the input guys.

I know that there is no substitute for visually identifying accumulation, but hopefully I can try out some of these ideas and see if it draws my attention to the types of stocks I would look at monitoring.

Hi Pav,
I know you are pursuing the Wyckoff/VSA concepts looking at the price/volume/range relationship.
So...if you think about it, that happens prior to tradeable moves is an extreme in volume. Either an extreme high or my favourite, an extreme low volume event.
For this reason I do 2 individual scans,
one for extreme high volume (last volume 70% > [ 100MA Volume]
secondly extreme low volume ( last volume 70%< [ 100ma Volume]
Then I eyeball the results.
These 2 scans not only produce enough prospects to keep me trading but additionally give some clues to current overall market sentiment by watching the relative numbers returned by each scan.
I know this scan is simplistic, yet for a Wyckoff trader, it returns results which are of interest. Hope you find it worthwhile

 

[tech/a]

Whilst there are literally 100s of ways of Identifting Accumulation/Distribution areas or Consolidation (As Peter and others have pointed out) very few do what you are expecting PAV.

Mistagear is correct in his analogy and I have a scan not dis similar to his principal.

I also have one which counts Positive and Negative volume over X periods. (Sorry I paid for it). It has a twist with regard to VERY high volume bars followed by a reversal.

Another trick I dont mind sharing is to use a formula like Mistagrear's and have it as an alert with a look back of 10/20/30 periods.
Youll find the volume needed to pull a move up and the look back will give you trades which begin to accumulate or distribute.

You can then save them to a seach which you can screen daily for either in coming volume during the Consolidation or Extremely low volume which can indicate lack of supply or demand. This will give you a host of stocks in your stable you are watching.

Often youll note they display very similar characteristics!!

I also have a very Rare book/s on Volume home with some out there ideas which Ill post the details to for those interested.

But in the end
You have 3 places to enter one of these trades in your direction.
(1) At the base of consolidation
(2) At the breakout of consolidation.
(3) Or both


Identifying Consolidation is one thing.
Identifying whats actually happening with in it completely another.
(EG very high volume on the consolidation without range---is it demand or supply?
PAV---Think Volume support/resistance--as we have discussed.)
Good Risk management means you will be able to trade most without much concern toward loss.

 

[pavilion103]

Hi Pav,
I know you are pursuing the Wyckoff/VSA concepts looking at the price/volume/range relationship.
So...if you think about it, that happens prior to tradeable moves is an extreme in volume. Either an extreme high or my favourite, an extreme low volume event.
For this reason I do 2 individual scans,
one for extreme high volume (last volume 70% > [ 100MA Volume]
secondly extreme low volume ( last volume 70%< [ 100ma Volume]
Then I eyeball the results.
These 2 scans not only produce enough prospects to keep me trading but additionally give some clues to current overall market sentiment by watching the relative numbers returned by each scan.
I know this scan is simplistic, yet for a Wyckoff trader, it returns results which are of interest. Hope you find it worthwhile

Thanks mate, I'll give it a crack.

 

[Gringotts Bank]

You can use this if you like. I wrote it just last week, and it's very simple.

NB: This is a long term signal. Look for areas where the MA spikes repeatedly over a number of weeks/months to new highs.. It almost always corresponds with major turning points. Zoom your chart right out, remember it's a long term indicator and won't work for trading short term.

_SECTION_BEGIN("GB's High-Low Range");
a = (H-L)/L*100;
Plot(a,"A",colorBlack,styleLine);
_SECTION_BEGIN("TEMA");
P = ParamField("Price field",-1);
Periods = Param("Periods", 15, 2, 300, 1, 10 );
Plot( TEMA( P, Periods ), _DEFAULT_NAME(), ParamColor( "Color", colorCycle ), ParamStyle("Style") );
_SECTION_END();