Money Flow vs OBV

[wbosher]

I'm reading Technical analysis of the Financial Markets by John Murphy and I'm up to the part where he is talking about Volume. He has just mentioned an indicator called "Money Flow" which appears to be similar to OBV but a little more jumpy (I've just compared the two on the NZX website). It looks pretty good to me but I'd like to know what do you experienced TA's think of this indicator? I've seen OBV mentioned often on this forum but I haven't come acress Money Flow yet.

This is a really good book for TA newbies like myself, the only thing I don't like about it is that it isn't specifically for stocks (which is all that I'm interested in at the moment), it spends quite a lot of time talking about futures. A very small gripe, but otherwise a great read.

[Phaedrus]

WB, So long as you follow volume closely, the means that you use is of secondary importance. There are a lot of indicators that incorporate volume, the most commonly used perhaps being OBV, Price/Volume Trend and Accumulation/Distribution. Even a simple volume histogram can suffice, though, - especially if the bars for Up days and Down days are differentiated by being in different colours.

Essentially, these indicators all give us much the same information and which one(s) you decide to use comes down to personal preference. I like OBV not because it is the best but because it is the simplest and easiest to understand. It is not possible to state which volume indicator is "best", any more than it is possible to say which oscillator is "best" or which moving average is "best".

[wbosher]

Cheers Phaedrus. Glad you recommended this book, a lot of good information in there if your eyes can handle the 500+ pages.