15. Tick-Based Volume Indicators

“According to the dictionary, distribution is ‘the position, arrangement or frequency of occurrence over an area or throughout a space or unit of time.’ The volume of everything distributes around a mean over time. Why should trading volume be different?”

—Market Profile, Chicago Board of Trade

So far in the quest to better understand the relationship between supply and demand, we have investigated several methods to pinpoint whether money flows into or out of the market. These include close to close, open versus close, and various determinations of price range. All these methods represent differing opinions about how to measure the relationship.

Earlier, I discussed how stocks trade on an exchange market. You ...

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