Category: 4. Volume indicators

Calculations and the Klinger volume indicator’s formula  The calculations and the Klinger volume indicator’s formula is complex and traders do not need to comprehend it. Instead, they need to fully understand how to interpret the indicator. However, we are going to share the basics of the calculations and the Klinger volume indicator’s formula. The first…

What is the Volume Price Trend indicator (VPT)? VPT is an interesting volume indicator Experts define the volume price trend (VPT) as a price-volume trend at times. It joins price and volume in the market to make a hybrid trading indicator of the two variables.  The basic idea behind the indicator is to multiply the…

What is the Volume Oscillator? The volume oscillator is made up of two moving averages of volume, one fast and the other slow. The moving average of the fast volume is subtracted from the moving average of the slow volume. The volume oscillator is mostly understood using the same principles as volume analysis. An increase or decrease…

What is the Volume Profile indicator? Volume Profile is an advanced charting study and indicator. It shows the traded volume amount of an asset over a specified period, at certain price levels. Volume Profile makes use of previous traded volume and all the strategies and plans are brought from historical data. Traders focus on the regions where…

What is the VWMA? The volume-weighted moving average indicator is a tool that combines moving averages and volume. It gives more weight to heavy-volume bars as compared to bars having low volume. The VWMA allows the volume-weighted moving average to calculate a moving average that will be close to areas where most of the trading happens. It…

What is the VWAP? The volume-weighted average price (VWAP) indicator is among such indicators that look to make the most of the volume. It is a technical analysis tool that calculates the true average price of a financial asset weighted by volume for a predefined period of time. The incorporation of volume into the average price of a…

What is the On Balance Volume indicator? Joe Granville create the On Balance Volume indicator (abbreviated OBV) in the 1960s. Back then, it was a revolutionary indicator. Today, a lot of professional traders use this leading indicator for trading and analysis. The indicator considers volume and if the volume is pushing prices up or down. Its main purpose…

What is the Accumulation/Distribution indicator? Accumulation/distribution is a cumulative indicator. It makes use of volume and price to assess if a stock is being accumulated or distributed. The indicator seeks to identify divergences between the volume flow and stock price. This offers insight into how strong a trend is. If the price is increasing but…

High volume is a clear sign that many buyers and sellers are interested in the given asset (may it be a stock, currency pair, commodity, …).A high volume near resistance levels is a sign many traders are willing to defend this line. The same is true for a support level. When price is moving in a…

Each indicator tells a different story. That’s why for the same feature (here the volume on a given time period), there can be multiple indicators. Each volume-based indicator does its own computation and uses the volume only or in conjunction with other data. Technical analysis is an approach where you need many stories to point in…