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MetaStock
Formula - Arms
Index (TRIN)
rev. 01/06/97
The Arms Index,
also known as TRIN, is a market indicator that
shows the relationship between the number of
stocks that increase or decrease in price
(advancing/declining issues) and the volume
associated with stocks that increase or decrease
in price (advancing/declining volume). The Arms
Index was developed by Richard W. Arms, Jr. in
1967.
The Arms Index is
primarily a short term trading tool. The Index
shows whether volume is flowing into advancing or
declining stocks. If more volume is associated
with advancing stocks than declining stocks, the
Arms Index will be less than 1.0; if more volume
is associated with declining stocks, the Index
will be greater than 1.0.
The formula for
the Arms Index is:
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(Advancing
Issues / Declining Issues) / (Advancing
Volume / Declining Volume)
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To calculate the Arms Index in MetaStock™ for
Windows you will need to first collect the four
pieces of data.
- Reuters Trend
Data (RTD) supplies this data in two files.
The tickers are X.NYSE-A (Advances, number and
volume) and X.NYSE-D (Declines, number and
volume).
- Dial/Data also
supplies this data in two files. Advances,
number and volume and Declines, number and
volume. The tickers are @*NAZ_K and @*NDZ_K.
- CompuServe
supplies this data in 4 files. The tickers are
NYSEI (Advances)use the cusip 00000157 rather
than the symbol; NYSEJ (declines); NYUP
(Advance volume) and NYDN (decline volume).
After the data has
been collected follow these steps:
For data
from RTD or Dial Data
- In the
DownLoader™ create a composite security of
the Advances / Declines.
- In MetaStock
open the composite.
- Create and plot
the custom formula: C/V
- This gives you
the Arms Index (TRIN).
For data
from CompuServe
- In the
DownLoader create the two composites.
- Advancing
Issues / Declining Issues
- Advancing
Volume / Declining Volume
- In MetaStock
open both composites.
- Tile the charts
so they can both be viewed.
- Drag the plot
of the Adv. Volume/Dec. Volume composite into
an inner window in the Adv. Issues/Dec. Issues
chart.
- Create the
custom formula: C/P
- Plot this
formula on top of the Adv. Volume/Dec. Volume
plot (the Adv. Volume/Dec. Volume plot will
turn a purplish color to signify the formula
will be plotted on it).
You will know have
the Arms Index (TRIN) plotted. You can drag it to
its own inner window if you prefer.
For interpretation
refer to Mr. Arms book, The Arms Index. |
