Why analyze Stock Volume Charts?
Stock volume charts can help you determine the health of an existing trend. A moving average of the volume should be taken into consideration in developing your Market Timing system. A Moving Average is an indicator that shows the average value of a security’s price over a period of time. This is important for technical analysis because when the current volume rises above a long term volume moving average this is potentially a signal that there is increased market activity that will be affecting the price. Thus, it is important to provide this indicator as an input. Intraday Volume for stocks helps you see where a stock is being repeatedly bought as it dips. Likewise, towards the end of a rally, an expanded range bar together with a spike in volume often signals that the move is at an end, at least short-term. If you weren’t aware of it before, I hope you’re starting to see why volume is a trader’s best friend. Additionally, unlike many indicators, volume is applicable to every timefra
