What is a volume based chart?

A price by volume (PBV) chart is a horizontal histogram plotted on a security’s chart, showing the volume of shares traded at a specific price level. Often times, price by volume histograms are found on the Y-axis and are used by technical traders to predict areas of support and resistance.

Which is the best volume based indicator?

The 6+ Best Volume Indicators in Day Trading

  • VWAP.
  • Volume-Weighted Moving Average (VWMA)
  • Money Flow Index (MFI)
  • Accumulation and distribution indicator.
  • Klinger Oscillator.
  • On Balance Volume (OBV)
  • Other volume indicators.

How do you read stock volume charts?

The vertical lines displayed at the bottom of the chart represent the number of shares traded during the specific time period of the chart. The length of the volume bar indicates a value that corresponds to the scale at its right.

What is volume based strategy?

On the one hand, volume simply measures how much a given currency pair has traded over any given period of time. Volume is used to measure the strength and weakness of a trend. As a general rule, a strong trend should be accompanied by rising volume.

Is RSI a volume indicator?

The Volume RSI (Relative Strength Index) is a volume indicator which is similar to the Relative Strength Index except that up-volume and down-volume are used in the formula of RSI instead of changes in price. Volume RSI oscillates around 50% center-line in the range from 0 to 100%.

What does volume tell you about a stock?

Key Takeaways Volume measures the number of shares traded in a stock or contracts traded in futures or options. Volume can indicate market strength, as rising markets on increasing volume are typically viewed as strong and healthy. When prices fall on increasing volume, the trend is gathering strength to the downside.

How can you tell if stock volume is buying or selling?

If the price and volume go up then the volume is considered a buy vol. Likewise, if price comes down, and vol increases it is considered a sell volume.

Is low volume bullish or bearish?

Understanding Down Volume Down volume is the opposite of up volume, in which a security’s price increases with higher volume. Down volume indicates bearish trading, while up volume indicates bullish trading.

Is high volume good for stocks?

If you see a stock that’s appreciating on high volume, it’s more likely to be a sustainable move. If you see a stock that’s appreciating on low volume, it could be a dead cat bounce. Logically, when more money is moving a stock price, it means there is more demand for that stock.

Should I buy stock with high volume?