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So lets test if volume and price are independent. We can estimate this by using mutual information. When x and y are independent, their mutual information is 0 so measures of mutual information entropy should be zero. Lets calculate this for the IBM case with 10 years of daily closing price and data volumen. library(infotheo) ...


Pring was (probably) simply referring to the fact that most indicators are function of price -- lots of different ways to twist and contort prices to define trends, reversal points, etc. Volume is another parameter entirely, as it doesn't depend on price; the market or share price can have an up day on average, high, or low volume, it can have a down day on ...

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