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The Effective Float Theory Is Proprietary

Definition: EFFECTIVE FLOAT
(The author poses the argument that under normal trading in any month, the official Float represents the maximum volume that should occur)

The Effective Float is the number of shares needed to support a 21 day average
volume of _xx__ shares. There are typically 21 trading days in a month.

EF is also an early indicator that invites comparison to the current OFFICIAL FLOAT - is the current monthly EF higher or lower than the official Float.

If the current EF is EQUAL TO OR HIGHER than the offical Float, that is considered a strong indication of NSS/dilutionl.
If the current EF is LESS THAN the offical Float, that is considered normal.
Putting The Theory To Use
The Effective Float Theory works best with stocks that have been been actively trading for at least 3 months. Although knowing the actual Float is helpful, it is not required information. In cases where the actual Float is not known, the EF remains valid and may indicate the true level of the actual Float.

When compared against a companies known Float, the Effective Float is intended to provide an indicator. Under normal trading patterns, the EF should always be less than the known float

Shorting and/or dilution - indicated when EF starts to approach - or is above - the known float
Liqudity problems - indicated when EF is below 10% of the known float
Definition: WORKING FLOAT

The Working Float is the number of shares needed to support an 8 day average
volume of _xx__ shares..

WF is an early indicator that invites comparison to the current single day trading volume - is the current days volume higher or lower than the WF.

If the current volume is HIGHER than WF, that is considered a "BUY" signal.
If the current volume is LOWER than WF, that is considered a "SELL" signal.