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Indicator Index
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  1. Accumulation / Distribution
  2. Aroon Oscillator *
  3. Aroon Up/Down *
  4. Average Directional Index
  5. Average True Range
  6. Bollinger Bands
  7. Bollinger Band Width *
  8. Chaikin Money Flow Index *
  9. Chaikin Oscillator *
  10. Chaikin Volatility *
  11. Close Location Value *
  12. Commodity Channel Index
  13. Detrended Price Oscillator *
  14. Donchian Channel *
  15. Donchian Channel Width *
  16. Ease of Movement *
  17. Exponential Moving Average
  18. MACD
  19. Mass Index *
  20. Momentum
  21. Money Flow Index
  22. Negative Volume Index *
  23. On Balance Volume
  24. Pcnt Price Oscillator *
  25. Pcnt Volume Oscillator *
  26. Performance *
  27. Positive Volume Index *
  28. Price Envelope
  29. Price Volume Trend *
  30. Rate of Change
  31. Relative Strength Index
  32. Simple Moving Average
  33. Stochastic - Fast
  34. Stochastic - Slow
  35. Stochastic RSI *
  36. Standard Deviation *
  37. Triple Moving Average *
  38. TRIX *
  39. Ultimate Oscillator
  40. Volume
  41. Weighted Moving Average *
  42. Williams Percent R

Volume

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Volume can be a barometer of future activity and direction. Volume measures the number of contracts that exchanged hands during the trading session. It measures market activity.

Volume is tracked on an individual delivery month and total symbol basis. For example, the study on the daily November Soybean chart only displays the volume for the November contract.

Volume does not have straight and simple trading rules. Volume is a measurement of the ebb and flow of the underlying market. Are new buyers/sellers entering the market? Are traders liquidating their positions? Does Volume confirm the trend or suggest a change in trend? The Volume data creates a lot of questions but not many simple answers to those questions.

The histogram (vertical lines) represent the volume on a daily basis. Traditionally, traders have used these rules for volume analysis:

  • If prices are up and volume is rising, the market is strong.
  • If prices are up and volume is declining, the market is weak.
  • If prices are down and volume is rising, the market is weak.
  • If prices are down and volume is declining, the market is strong.
Other rules you might find worthwhile:
  • In a bull market, volume has a tendency to increase on rallies and to decrease on reactions.
  • In a bear market, volume has a tendency to increase on declines and decrease on rallies.
  • Trading volume usually increases dramatically at tops and bottoms in the price chart.

At first, it appears these trading rules are in conflict. Actually, they imply very similar market conditions. Volume information is often a quite useful indicator, especially when the trading volume deviates from expected patterns. This includes contra-seasonal moves, volume patterns versus chart patterns, and divergence.

You can use volume to determine market action. You must watch for divergence between price direction and volume. For instance, if the market makes new highs while volume falls short of the previous high, it implies the market is getting weaker. In short, fewer buyers are willing to enter the market at current price levels.

Computation

This study has no computations. The values for the volume are transmitted from the exchanges. However, the actual volume figures are always one day behind price information. You will not know Monday's volume until Tuesday at approximately noon (for U.S. markets - central time). That is due to the exchanges and their reporting requirements.


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