The Herrick Payoff Index is designed to show the amount of money flowing into or out of a futures contract. The Index uses open interest during. The Herrick Payoff Index (HPI) was authored by John Herrick. The HPI is used to analyze futures and commodities. One input parameter called value of one. What is Herrick Payoff Index? This is a commodity trading tool, useful for the early spotting of changes in price trend direction.

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Nicolas Thank you Xusto. Even though crude oil prices made a higher high at High 2, volume and open interest changes did not match those price increases on the second high. What is Kicking pattern: As noted on the weekly chart, the correction was sharp, but quite brief, which is typical inddx bull market corrections.

Herrick Payoff Index

The Payoff Index tends to give coincident signals within a day or two before a significant change in price trend. This should put platinum traders on alert for a possible ihdex in the futures as the divergence continues to grow. The interpretation of the Herrick Payoff Index involves looking for divergences between the Index and prices.

Noting the year period leading up to the s was one in which real assets tended to outperform financial assets, many have looked to real assets – gold, commodities, real estate – in search of the next secular bull market.

The HPI can be analyzed on many levels, and the most simple is to determine whether it is above or below the zero line.

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The Herrick Payoff Index is an excellent technical patoff tool using volume and open interest to confirm price movement and warn of potential reversals. Veteran futures traders will hetrick you that years ago if crude prices made the regular news, it often meant that crude was close to a turning point, but this is not the case now.


What is Three Outside Up: The results are similar to the smoothing obtained by a moving average. For more on basic open interest analysis, please see my earlier article, Futures Trading — Open Interest. I recommend these improved versions for prorealtime. Monthly, Weekly and Daily Activity and Equity analysis daily Equity monthly range seasonality volume weekly.

Herrick Payoff Index

The contract for gold continuous futures appears on the surface to be much harder to interpret from a Herrick Payoff Index perspective. What is Two Crows: What is Dark Cloud Cover: The Payoff Index frequently helps distinguish between a rally in a trend that is destined to continue and a significant trend change that will provide a worthwhile trading opportunity. Although more volatile that the other precious metals, gold too can be tracked using the HPI.

What is Bearish Harami: What is Downside Tasuki Gap: What is Opening Marubozu?

The logic behind the Payoft indicator is that there was much trader excitement in crude oil herricj High 1, characterized by increasing volume and open interest.

This is the period on the weekly chart that I noted previously where the weekly formed a slight negative divergence. Trading may expose you to risk of loss greater than your deposits and is only suitable for experienced investors who have sufficient financial means to bear such risk.

Analysts have observed that volume trends often change before a price-trend change.

What is Abandoned Baby Bottom: The information above is for informational and entertainment purposes only and does not constitute trading advice or a solicitation to buy or sell any stock, option, future, commodity, or forex product.

The prism through which I want to look at three precious metals futures contracts the continuous contracts for silver, platinum and gold is the Herrick Payoff Index. Aspray wrote about in the s, such as the MACD, have since gained worldwide acceptance. The “flow” in this case is open interest, which is simply the total number of outstanding futures contracts – long and short.


This brought crude back to the October lows and was a deep enough correction for many to conclude the rally in crude was over.

herrick payoff index – Indices – MQL4 and MetaTrader 4 – MQL4 programming forum

There are also generally accepted relationships between the price trend and the trend of open interest. What is Heerrick Black Crow: Cumulative volumes zigzag divergences divergences volume volumes Wyckoff. In an earlier article, I discussed how the action of the open interest should be watched carefully by futures traders.

The daily chart of July corn shows the trading range discussed on the weekly chart, lines C and D. For a one cent move, I commend for financials and metals with for the rest of the commodities. However it is here indsx the divergences between the HPI and silver futures begin.

As I have suggested elsewhere, there is a growing fundamentally-oriented consensus among many “thinking-outside-the-box” money managers and market analysts that the year run for financial assets that began in the early s is finally at an end, and that new leadership will have to come from a different set of assets. The Herrick Payoff Index HPI uses volumeopen inerest, and price to signal bullish and bearish divergences in the price of a future or options contract.

What are Continuation and reversal patterns? What is Advance Block: Yes, precious metal futures. What is Bearish Harami Cross: