Candlestick Trading Blog
March 13, 2009
Volume Trading
| Volume trading is a form of technical analysis and used together they can indicate bias in the stock market. More specifically volume analysis is used in conjunction with technical analysis and they can both be very helpful when investing in stock. Stock volume is the daily number of shares of a security that is exchanged between investors. In today's article we will go over various terminology used in volume analysis as it relates to trading and investing Buying Volume – Any volume that is generated as the index moves higher. This is different from a VMA surge because it is not a distinct surge however volume is still generated. Selling Volume – Any volume that is generated as the index moves lower however not a distinct surge. VMA - Volume Moving Averages – Just like to moving average technical indicator used for security prices, the volume moving average (VMA) is the same thing except it plots the volume instead of the price. The duration ranges from a few minutes to many months. Volume Moving Averages Surges (VMA Surges) – When volume trading, the VMA surges are a sign of sudden bursts of significant buying or selling activity. The surges are large peaks visually seen by the stock trader and they are either bearish or bullish VMA surges. Bearish Volume Surge – This surge indicates that the index is moving down. This means that a large number of low-priced shares are currently being distributed to another group of market investors. After this bearish surge, the number of sellers who are trading shares decreases as sellers are no longer willing to dump their shares at the bid. The market is vulnerable to a trend reversal and has reached a very critical point. Bullish Volume Surge – This surge indicates that the index is moving higher. This means that a large number of high-priced shares are currently being distributed to another group of market investors. After this bullish surge, the number of buyers decreases as stock prices become inflated. Again, the market is vulnerable to a trend reversal and has reached a very critical point. Bearish Volume Accumulation – When volume trading volume is accrued during the price moving down. This accumulation shows the number of shares that were sold during this down-trend on the stock market, and the larger the accumulation of the bullish volume the stronger the index or stock is oversold. Bullish Volume Accumulation – Volume is accrued as the price moves up when trading stocks. It displays the number of shares that were bought in the up-trend. The larger the accumulation of the bullish volume the stronger the index or stock is overbought. There is a lot more to volume trading that investors should research and when used with other technical indicators, these volume analysis indicators can confirm trends in the market. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
|
 |
|
 |
|
 |
|
 |
------------------------------------------------------------------- -
0 Comments:
Post a Comment
<< Blog Home