Daveatt

Relative Volume Combined With a Cumulative Function

Hi everyone

The today's script was suggested by a follower.

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1 minute of Knowledge
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Many traders look at volume as a pre-signal that a move may happen.
In trading, some say that "the volume precedes the movement".
This simply means that often volume will increase before a significant move in the stock.

Imagine if a unique trader is buying a crypto/stock. The volume is unlikely to move.
But, if all the mass goes to mass spot buy an asset, then we could see a volume spike announcing a potential upwards move.

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What's the story with that indicator?
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It's an interesting way of presenting the volume data.
Will show the total volume for the selected period.
You can choose between relative and cumulative presentation.

The users can display the consecutive rising volume above the 0 line and the failing volume below that line.

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Mix knowledge with usefulness
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A price making a higher/high (HH) or lower/low (LL) has a real and strong meaning- a HH or LL on a volume has a significant meaning also.
Increasing volume for a stock/crypto, could signify that buyers were willing to purchase a bigger number of shares at a higher price (comparatively to the day before)
Obviously, non-stop crazy buying/shorting won't work at some point - and that "some point" may hurt a bit.

Such volume indicator combined with others like momentum or strength indicators is a nice trading strategy.
The volume announces that a move may happen and the other indicators will confirm the prophecy :)

Peace
Dave

📧 dave@best-trading-indicator

⏩ Trading Course: https://best-trading-indicator.com/pages/concepts

🐦 Twitter: https://twitter.com/bti_trading

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