Float Analysis study

Float definition: Number of shares of a corporation that are outstanding and available for trading by the public, excluding insiders or restricted stock on a when-issued basis. A stock's volatility is inversely correlated to its float.

This is a strategy that plots Float Analysis study by Steve Woods. It doesn't implement any trading rules.

How it works

The float for each U.S. stock is obtained from the Yahoo website. The strategy will not work if float can't be downloaded. Firstly, the strategy determines a starting point which is the first detected 10% price reversal (configurable interactively). Starting on that day and working forward, the current day's volume is added to the previous day's volume and adds that to the next previous day's volume and so on. As each volume number from the past is added cumulatively, the running total is compared with the particular stock's float. When the cumulative total is equal to or greater than the float, a Red Vertical bar is placed above that particular bar on the chart.

Then two horizontal lines plotted on the chart are, respectively, the highest price reached during the count (the top line) and the lowest price (the bottom line). These lines serve as trigger lines for the buy and sell signals. When the stock's price goes through the top line it gives a buy signal, and when it goes through the bottom line it gives a sell signal. The lines extend backward from the starting date to the bar, where the float has gone through one complete turnover.

Some stocks with a small float may take months or years to go through one complete turnover, while other stocks with large floats may have a rapid turnover in a matter of days.

Requires installed Community.Components library extension.