I have no doubt that many people use the TRIN indicator, and some perhaps even successfully. However, I have a question regarding its theoretical basis and validity. Permit me to explain, and perhaps you can help clarify my thinking. As I understand it, TRIN is calculated as follows: (advancing issues/declining issue)/(volume of advancing issues/volume of declining issues) http://www.investopedia.com/terms/a/arms.asp This equation can also be presented in the following manner without changing its resulting value: (advancing issues/declining issue)x(volume of declining issues/volume of advancing issues) Therefore, what we are doing is multiplying the number of advancing issues by the volume of declining issues and then dividing this numerator by the product of the number of declining issues times the volume of advancing issues. It is here that I have a bit of a problem with my understanding. If we are multiplying the number of advancing issues by the volume of declining issues, are we not muddling the number? If we were looking to go long, then we would probably want the number of advancing issues to be high and the volume of declining issues to be low. So do we want the resulting numerator to be higher or lower, because each of its two components are on opposing sides: we want more advancing issues but lower volume of declining issues? Similarly, the denominator of the TRIN equation is the product of the number of declining issues multiplied by the volume of advancing issues. Again, do we want this denominator to be higher or lower, since if we were looking to go long we would probably want a lower number of declining issues and a higher volume of advancing issues? Essentially, each of the two components of both the numerator and the denominator are at odds with each other. Therefore, is the numerator, say, higher because the good number is higher or because the bad number is higher? Similarly, is the denominator, say, lower because the bad number is lower or because the good number is lower? In effect, do you really know what the indicator is actually saying because of the apparently contradictory nature of its construction? Admittedly, I am looking at the indicator in isolation and I will not pretend that I know how to use it. And I am not looking to discount its practical value to those traders who have used it with positive effect. What I am asking is, what theoretical value does it offer if my above observations are valid? And if my observations are not valid, then please tell me why.