TopBottom Finder

The Midas method of technical analysis was introduced by Paul Levine. You can

find more information on Midas by doing a quick search on Google. There is

also a good article on the subject by Andrew Coles and David Hawkins in the

July 2009 issue of TASC.

 

Standard Midas lines are based on volume-weighted average price as measured

from a specific launch point…generally a swing low that represents the

beginning of an up-trend, or a swing high that represents the beginning of

a down trend. In general, Midas lines offer strong support/resistance and,

when broken, indicate trend exhaustion.

 

The Top/Bottom Finder is based on Levine’s belief that each trend has a fixed

amount of “fuel” (cumulative volume) and as the trend develops it will follow

the curve of the Top/Bottom Finder plot. When the “fuel” is consumed then

the trend is over and prices (in an uptrend) will likely move to the Midas curve.

 

The key to the operation of the Top/Bottom Finder is to determine the correct

amount of “fuel” (cumulative volume) to assign to the curve and, therefore,

to the trend you are measuring. This normally cumbersome and tedious process is

fully automated in our Top/Bottom Finder indicator. To begin the process you

click on the “TBf” activator button that you see at the bottom-left of your chart

and then you click once on the anchor point (the beginning of the trend), and

then you click again at the first pullback of the trend. The indicator will then

run an optimization process to find the amount of total volume that creates a

support/resistance curve that best fits the trend from the point of origination to

the pullback, and once it arrives at this number it will plot the curve. This

process generally takes less than a second to complete.

 

Now if you are not happy with the optimized Top/Bottom Finder curve you can

fine-tune it to a high degree. This is done by double-clicking on the curve

line which will pull up a Curve Control button bar for that line. With the

button bar you can increase the cumulative volume being considered, decrease the

cumulative volume being considered, reset the curve back to its optimized cumulative

volume value, and delete the curve entirely.

 

Once a Top/Bottom Finder curve has been created, as new bars come in the Top/Bottom

Finder will continue to plot and update until the allocated cumulative volume is

exhausted…which indicates the end of the trend based on this particular Top/Bottom

Finder curve.