Volume: In this section we introduce the second aspect of charting. This is called volume. Traded volume is the number of quantity of stocks which change hand. The volume is shown as a sub graph in the price-time chart, below the price window. Higher the volume in any particular move, the greater is the conviction in that move to continue greater distance in that direction. However, if volume is on the lower side during a move, the stock is generally bound to lose momentum. Generally, during range bound phases, the volume is low.
| Trend | Volume | Interpretation |
|---|---|---|
| Up | High | Up trend may go greater distance |
| Up | Low | Lack of conviction/ participation in uptrend. Likely to retrace. |
| Down | High | Down move may cover greater distance |
| Down | Low | Less conviction in the down move, may reverse |
No comments:
Post a Comment