The purpose of this thread is discussing a little idea I had. The background is simple. One could see the markets as a pool of some viscose liquid. If someone throws a rock in to this âpoolâ the wave that is caused by this action will be larger or smaller depending on the weight of the rock. It is easy to demonstrate that the amplitude of the wave and its duration in time (before it fades away) will depend on the kinetic energy stored in the rockâs movement and the level of liquidâs viscosity. The kinetic energy is something that one could figure out using gradeâs 5 math: E = (m * square(v))/2, where âmâ is the mass of the rock and âvâ its velocity. Applying this formula to the markets is also easy. One could possibly use the following interpretation: âmâ = Volume of shares, âvâ = Price change in the unit of time (priceâs rate of change). So the âkinetic energyâ of the market moving event of any kind could be assessed by squaring the price rate of change and multiplying it by the number of shares traded in the same period of time that has been used to assess the price change. The tougher question, of course, is how do we model the viscosity? One of the ideas I had is to use a simple ATR indicator to divide the Kinetic energy by it to normalize the energy by the size of average swings observed in the market. I have built a few indicators using this idea and applied it to a chart. At some point of time I will post that chart but for now I would like to discuss the approach first and listen to the ideas that folks might have. It is quite easy to program such an indicator in any charting software to see the results. I personally plotted it as a histogram. It did produce surprisingly interesting results for such a simple indicator, but I donât want to influence your opinion and would like to discuss this idea first. Cheers.