The accumulation distribution indicator (ADL) is a volume-measurement kind of indicator. It was created by a well-known trader and analyst, Marc Chaikin, as a stock selection tool. He has subsequently found broader application as a leading indicator for other markets,...
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Volume is a key factor when analyzing price action and technical analysis.
Trading volume is a way to show how many assets were traded on any given period of time.
It plays a big role in price movement.
What are volume indicators?
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 the same direction to get confident in taking a trade.
The most famous volume indicators are the Accumulation / Distribution indicator, the On Balance Volume, the Stochastic Oscillator, the Negative Volume Index, the VWAP, the VWMA, the Chaikin Money Flow, the Volume Profile and many more.
Each of these technical indicators are very easy to add to your charts using TradingView. As you likely noticed, most of the price charts visible on our site are taken from this tool. There your chart gets updated as price and current volume change.
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Volume is a great way to assess market trends on a price chart.
Why is high volume important?
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 trend, might it be an up or down trend, an increase in volume when price reaches new extremes is a great signal that this trend is likely to continue.
Heavy volume is a sign of strong interest from many traders in the asset at current price levels.
Why is low volume important?
Low volume is a sign of low interest from the traders. It might be because traders are not interested in the asset or it might indicate price reached low interest zones. These zones can be either too high (no new buyer is willing to step in) or too low (no new seller is willing to step in).
When prices reach new highs but volume decreases, it might be a sign that buyer interest is slowing down and the up trend could reverse. The same is true for a new low but reversed (the down trend could reverse).
There are many volume indicators
All these hidden interest indications are visible when you encompass a volume analysis in your trading strategy.
Here, you’ll find more than 10 volume indicators described here. Each of them can greatly integrate with chart patterns so you can increase your chance of a trade going your way.
Want to go into the details of a specific volume indicator? You’re at the right place!
Feel free to discover the detailed article for each and every volume indicator right below :
The OBV (On Balance Volume) technical indicator uses volume to indicate momentum.The OBV indicator shows crowd sentiment and help traders predict a bullish or bearish outcome.It's mainly useful when in divergence with price as it shows unexpected strength or...
There are various technical indicators that have made the analysis of the financial markets remarkably easy. Some of them work with the objective of finding momentum. Others aim to find potential points of interest on a chart. But what is the most important aspect of...
If you have an interest in financial trading, you must have knowledge of two concepts, moving averages and volume. Moving averages is one of the most common and widely used indicators in the financial trading world. Volume is also another important concept that is...
Volume Profile shows the price where the security was most traded.It takes a given range for computation (either visible or fixed).The more volume traded at a given price, the bigger the Volume Profile bar will be. What is the Volume Profile indicator? Volume Profile...
The Volume Oscillator identifies the trend in volumes with a system of two Exponential Moving Averages..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...
The Volume Price Trend is a volume momentum indicator.It makes use of both percentage changes in price and volume. It uses them to confirm the strength of the trend in price. The volume price indicator adds or subtracts multiples of a percentage change in recent stock...
The Klinger volume oscillator is a volume-based indicator.It identifies long-term trends of money flow of a particular security. The Klinger volume oscillator is a volume-based indicator that functions to identify long-term trends of money flow of a particular...
Trading volume or volume of trade is a measure of completed trades in a particular security in a given period of time.It is a measure of two very important factors: market activity and liquidity.The higher the trading volume during a price move, the more significant...
Net volume indicator is a simple technical analysis tool that works on a simple calculation.It is the difference between a security's uptick volume and its downtick volume.A positive value indicates that volume uptick and buying pressure is greater than the volume...
The Negative Volume Index (NVI) indicator shows how down volume days impact price.It aims at reflecting the mindset of the smart money professionals. Paul Dysart invented the Negative Volume Index (NVI) indicator. It watches the trade volume and Paul considered trade...
Depth of Market (DOM) is an electronic list of pending orders for a particular stock or any other financial instrument. In the simplest terms, DOM is a visual display of open buying and selling orders, organized by price level, for a specific instrument. Depth of...
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