Click here to Login








Volume Trend Index - Market Indicator

by Brian Brown, 3305 days ago
Share |


If you add a stock's volume to a cumulative value when the stock's price goes up, subtract volume from the same cumulative value if the stock's price goes down and repeat this step for every trading bar then you will end up with the first and most popular technical analysis indicator that measures positive and negative volume flow.

The indicator name is OBV or on balance volume and it was introduced in 1963 in a Joe Granville's book "Granville's New Key to Stock Market Profits". The QuantShare Trading Software function for the on balance volume is "obv".

Now, let's calculate the OBV indicator for every stock in your list (group, sector, index or entire market), loop through every trading bar, assign a value of +1 to stocks with a 20-Bar rate of return of the OBV indicator that is higher than a specific threshold (let us say 10%) (up trend), a value of -1 to stocks with a 20-Bar rate of return of the OBV that is lower than -10% (down trend), a value of 0 to the remaining stocks and then sums the score of each stock and for each trading bar.

The result is an OBV-based market indicator - Volume Trend Index - that calculates the number of stocks with advancing OBV values minus the number of stocks with declining OBV values. An increase in the OBV is a sign that money is flowing into the stock and this is usually considered as a bullish sign. However, a high value of the Volume Trend Index could also be an indication that a top is near and that the market is about to reverse. On the opposite side, a very low value of the Volume Trend Index is a signal that the current bearish trend is near the end and that a new bullish cycle may begin.




You have to log in to bookmark this object
What is this?




Type: Composite Index

Object ID: 663


Country:
All

Market: Stock Market

Style:
Technical Analysis

Reviews
You must log in first

Join now
and get instant access for free to the trading software, the Sharing server and the Social network website.
Click here


Related objects

Empty

Number of reviews
Click to add a review
Average rate
Click to rate this item
Number of times this object was downloaded
Number of rates the current object received
Report an object
if you can't run it for example or if it contains errors
Click to report this object

Technical Analysis


Fundamental Analysis



Random Blog Posts

How to create market indicators using the composite function - Part 3

How to create market indicators using the composite function - Part 2

Create a Pivot Table that displays the Relative Strength Index - RSI

6 Stock Trading Items Related to the New York Stock Exchange - NYSE

Pivot Tables in QuantShare Trading Software

How to create market indicators using the composite function - Part 1

Optimize a trading strategy using the Sharpe ratio

How to create a trading indicator that uses stock news

Show All

Number of reviews
Click to add a review
Average rate
Click to rate this item
Number of times this object was downloaded
Number of rates the current object received
Report an object
if you can't run it for example or if it contains errors
Click to report this object






QuantShare
Product
QuantShare
Features
Create an account
Affiliate Program
Support
Contact Us
Trading Forum
How-to Lessons
Manual
Company
About Us
Privacy
Terms of Use

Copyright 2019 QuantShare.com
Social Media
Follow us on Facebook
Twitter Follow us on Twitter
Google+
Follow us on Google+
RSS Trading Items



Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.