MoneyStream Scan

Examples   Parameter Description   Typical Settings   Results Table

We have found Worden's MoneyStream indicator  to be an extremely useful indication of accumulation or distribution of an item.  Of particular usefulness are divergences between MoneyStream and Price.  If the MoneyStream starts climbing and the price stays flat, or if the price starts falling and MoneyStream does not, it is a good probability that there will be a price climb in the near future.  The reverse hold true as well - if price climbs strongly, but MoneyStream does not follow, then there is likely to be a price collapse soon after.  Click Here for some examples.

Details on MoneyStream are found in the TeleChart user manual, and video training courses are also available through the TeleChart Website.  TCScan+ will help you implement the strategies you learn from these sources, as they can not be fully-automated in the current version of TeleChart.

MoneyStream Scan Parameters

The MoneyStream Tab allows you to set the parameters for your MoneyStream scan.  You can check boxes to select whether to scan for MoneyStream Angles, Levels, and divergences in Angles and Levels.  You can then set the limits for these parameters.

The figure below illustrates the meaning of the various MoneyStream Scan parameters - a description is provided below.

TCScan+ helps you find two types of divergences:  (You can search for either or both at the same time.) 

  1. Level Divergences: Is the MoneyStream at a higher historical level than price at this point in time, or vice-versa?

  2. Angle Divergences: Is the MoneyStream rising faster or slower than Price at this point in time?

For Level Divergences, TCScan+ searches back over the Lookback Period you specify and determines the highest and lowest value for MoneyStream and Price.  The Low and High are then assigned values of 0 and 100, and the values in between are scaled accordingly.  Therefore, if you run a scan for MoneyStream levels from 50 to 100, you are specifying that the current MoneyStream level must fall in the top 50% of the range of MoneyStream values over the lookback period.  The difference between the levels of MoneyStream and Price is the Level Deviation.  For example, in the graph above, the latest MoneyStream value is at 88% of the lookback range, while the price is at 46% of the lookback range, so the level deviation is 88 - 46 = 42.  This is a positive deviation because the MoneyStream level is higher than the Price level.

For Angle Divergences, The MoneyStream and Price angles are calculated over the previous number of bars you specify in the box next to Angle Deviation.   Upward sloping lines have an angle from 0 to 90 (straight up), and downward sloping lines have an angle between 0 and -90 (straight down.)

You can search for MoneyStream angles within a range and for deviations between the MoneyStream and Price angles.  If the MoneyStream Angle is higher (more counter-clockwise) than the Price Angle then there is a positive angle deviation, and if the reverse is true, then there is a negative angle deviation.

To summarize, the parameters you can set are as follows:

MS Angle Range  The range of MoneyStream angles (slopes) to find.  The range is -90 (straight down) to 90 (straight up.)  The period over which to calculate the angle is entered in the box next to Bars to the right of the Angle Deviation box.

Angle Deviation specifies the minimum difference between price and MoneyStream angles.  This number should always be positive - you specify the type of deviation by clicking on one of the Deviation option buttons.

Level % Range specifies the range of MoneyStream levels to find, with the values measured as a percentage of the range of MoneyStream activity over the lookback period.

Level Deviation specifies the minimum difference between price and MoneyStream levels.  This number should always be positive - you specify the type of deviation by clicking on one of the Deviation option buttons.

Deviation  Select one of the option buttons to specify the type of deviations to find.

Use Close  Selecting this will cause the MoneyStream to be compared to the close prices instead of the average of the open, high, low and close.

Find Breakouts  Selecting this checkbox will get TCScan+ to find breakouts in MoneyStream.  It looks backwards in time at MoneyStream, finding the maximum value over a period varying in length between 20 and 60 bars, determined according to MoneyStream volatility.  It then alerts you when the current MoneyStream value rises above the maximum value.  When this checkbox is selected, the above parameter entry boxes are disabled, because they are not relevant to the breakout scan.

Log Scaling checking this box will cause TCScan+ to use Logarithmic Scaling (instead of the normal Arithmetic Scaling) for the charts.  When using logarithmic scaling you will notice that the price axis numbers on the chart do not increase linearly, but rather proportionally.  

Typical Settings

Long Positions We have found the best long opportunities searching for positive deviations in angle and level greater than 10, MoneyStream Level between 25 and 100, and MoneyStream Angle between  -10 and 90 degrees, with the angle bars set between 15 and 30.  We suggest you screen any items that pass your scan with additional indicators, for example 5-3 and 20-5 stochastics to determine overbought/oversold conditions.

Short Positions We have found good-probability shorts using negative deviations in angle and level greater than 10, MoneyStream Level between 0 and 50, and MoneyStream Angle between -90 and 20 degrees. 

Results Table

Depending on the options you check on the MoneyStream tab, the results table will have between 1 and 5 columns.  The column headed 'Name' lists the names of the items that passed your filter criteria.  The column headed 'Level' is the MoneyStream level, 'L Dev' is the difference in levels between the MoneyStream and Price, 'Angle' is the MoneyStream Angle, and 'A Dev' is the difference between the MoneyStream and Price Angles.  Note that the values in 'L Dev' and 'A Dev' will be positive numbers unless you have the Ignore Filter option set.  Their type of deviation is given by whether you selected the Positive or Negative option buttons.  When you have the Ignore Filter option set, then the Positive and Negative option buttons are ignored, and the 'L Dev' and 'A Dev' values will be shown as positive or negative, indicating positive or negative deviation.  PTrnd and VTrnd show the price and volume trend slopes respectively.