VBULLETIN SOLUTIONS

The Effective Volume method is based on the hypothesis that because institutional investors have to take large positions in stocks - in order for them to be able to make money - they need to be very cautious as not to induce price changes while they are still busy accumulating or distributing shares. They therefore use sophisticated software programs that drip-release orders on the market. The regularity of such orders will respond to the liquidity variations that appear on the other side of the market. The market is therefore in constant search of equilibrium. Everybody knows about price breakouts that attract new buyers whose buying fuels the new price trend. What is less well known, however, is that clever funds accumulate their positions before a breakout. While accumulating shares, these funds provoke some microscopic but regular demand/supply imbalances. By studying the price changes at regular small periods of time (one-minute intervals) and by relating these changes to the size..

Also known as: Effective Volume, vBulletin Solutions, Inc.

Primary location: Waterloo Belgium