Volume All
Volume Based Analysis
Volume studies have not been so popular in technical analysis as price based indicators. The main reason of unpopularity is that only until recent years, volume data (quotes) were available to only a few traders. Yet, nowadays, when computer technologies are advancing fast, this is not a problem to obtain volume quotes far stocks, indexes, futures and other tradable commodities. Furthermore, over the past couple of years, volume based analysis started to develop into equally important to the price analysis part.
When it comes to the analysis stocks and other securities price movements, it is important to ask yourself, how this movement could be described. The answer is simple. There only two parameters that describe price movement: change in the price and volume traded during this price change. Respectfully, the logical output would be using volume and price based analysis together. By analyzing only price, the same as analyzing only volume, would lead to the situation when a trader sees only a half of the picture. Furthermore, this trader bases his/her trading decision on the half data and half analysis only.
In volume based technical analysis, the same as in price technical analysis, moving averages are the most basic and most used indicators. While most trading tools use simple and exponential volume moving averages, weighted volume moving average could be also met in some researches.
If by using price based indicators traders may see the current trend, see how volatile this trend is, how fast it moves and how far it is from the recent resistance and support levels, in volume based technical analysis a trader will be looking for volume surges (abnormal trading activity), for money flow (whether traders are injecting or pulling out money) and for bearish and bullish volume (money) accumulation.
The main difference between price and volume based technical analysis is that most of the price based indicators are lagging indicators (they state fact after it happens) and they are used to confirm a trend or to follow a trend. In opposite, the majority of the volume based indicators are leading indicators (predict possible development of future trend), however, you have to remember that the predictions do not guarantee the future trend. Therefore, as was mentioned above, only harmonic use volume and price analysis may provide clear picture of future trend.
The most popular volume based indicators are PVO (Percentage Volume Oscillator), SBV (Selling Buying Volume), Chaikin Money Flow, Accumulation/Distribution and OBV (On Balance Volume).
About the Author
Independent professional stock market technical analyst. Visit my personal technical analysis blog based on volume and advance decline technical indicators applied to the indexes and exchanges. The information in my blog could be used for educational purposes of QQQQ, SPY and DIA traders.
Walker Lever Mashup: Volume 2 (All New Clips)
|
|
Aroma AWK-115S Hot H20 X-Press 1-1/2-Liter Cordless Water Kettle $22.88 1.5-liter capacity Easy cordless pouring with the patented Strix electric connector Safe-grip handle and no-drip spout Easy-to-read water level indicator Elegant brushed stainless steel finish… |
|
|
Toro 51599 Ultra 12 amp Variable-Speed Electric Blower/Vacuum with Metal Impeller $69.97 Powerful and effective, the Toro Ultra 3-in-1 Blower, Vacuum, and Leaf Shredder makes completing yard work fun and easy. With air speeds up to 235 mph, this electric blower nevertheless is lighter, quieter, and cleaner than similar gas blowers. And with a sleek, ergonomical design, it’s a tool that is easy to use and will grab your neighbors’ attention. .caption { font-family: Verdana, Helvetica… |
|
|
Honeywell RCWL300A1006 Premium Portable Wireless Door Chime and Push Button $31.19 The Honeywell RCWL300A P3 Premium Portable Wireless Door Chime and Push Button makes it easy to replace your home’s generic doorbell ring with a chime tune that better fits your individual style. This chime is also compatible with a wide range of optional security accessories that can help you safeguard your home and family, and it comes complete with a pre-programmed bell push button. .caption … |
|
|
Now 39: That’s What I Call Music $10.74 NOW That’s What I Call Music! Vol. 39 features 16 current major chart hits, plus four up-and-coming “NOW What’s Next” New Music Preview tracks. Included in NOW 39 are top chart hits from Katy Perry, LMFAO featuring Lauren Bennett and GoonRock, Pitbull featuring Ne-Yo, Afrojack and Nayer, Lady Gaga, Britney Spears, Jennifer Lopez featuring Pitbull, Lupe Fiasco, Tinie Tempah featuring Eric Turner… |
|
|
Looney Tunes – Golden Collection $30.83 LOONEY TUNES:GOLDEN COLLECTION VOL 1 – DVD Movie… |
|
|
Bob Seger – Greatest Hits $5.94 14 tracks of great music from Bob Seger on this Audio CD…. |
|
|
Star Wars: The Clone Wars – The Complete Season One [Blu-ray] $31.24 Star Wars : The Clone Wars: Season 1The “Clone Wars goes back to the original Star Wars film when Obi-Wan Kenobi tells Luke Skywalker that he was once a Jedi knight the same as your father and that they fought together in the Clone Wars. Since that moment fans have been obsessed with what the clone wars were. This new TV series takes place immediately after the events of Star Wars-Episode II… |
|
|
Pixar Short Films Collection: Volume 1 [Blu-ray] $22.54 Features include: •MPAA Rating: UNRATED•Format: Blu-Ray•Runtime: 54 minutes… |
|
|
Star Trek: The Original Series – Season 1 [Blu-ray] $62.98 Star Trek is an American science fiction entertainment series and media franchise. The Star Trek fictional universe created by Gene Roddenberry is the setting of six television series including the original 1966 Star Trek, in addition to ten feature films with an eleventh completed to be released on May 7, 2009 (May 8 in North America)…. |
|
|
Learning Resources LER6900 Time Tracker Programmable Electronic Timer $23.99 It’s never been easier or more fun to keep kids on track with this unique lighted electronic timer. Lighted sections alert kids to time left to complete a task. You can easily program green, yellow and red sections and six sound effects to indicate that time is running out. It teaches time management! Features 180 viewing, large, easy-to-read LCD display, volume control and pause feature. Measures… |