How To Analyze Trading Volume For Market Trends

Here is a step -by -step guide on how to analyze the volume of negotiation for market trends:

Step 1: Choose a delay

. Popular options include:

• Daily (graphics of 1 day, 5 days or 30 days)

• Weekly (1 week, 2 weeks or 4 weeks)

• Monthly (graphics of 3 months, 6 months or 12 funds)

Step 2: Identify market trends

Understand the market trend. Current trends include:

• Haussier (momentum up)

• Bearish (momentum down)

• Linked to the beach

• Average reversion

Step 3: Analyze the volume of trading

Get trading volume data from a reliable source, such as:

• API exchange

• Eod (end of the day) Data flow

• Market data suppliers such as Alpha Vantage or Yahoo Finance

Choose the market delay and trend that you have selected in step 1.

Step 4: Calculate the mobile averages

Calculate the mobile averages to identify the momentum. Popular options include:

• Simple mobile average (SMA)

• Exponential mobile average (EMA)

• Relative force index (RSI)

Use the data in step 3 and calculate the things in motion using the following formulas:

• SMA = (weighted average x closure price) / total volume

EMA = ((weighted average x closure price) + (Open price x weighted average) / (2 total volume)

• RSI = 100 – (100 / (1 + RS))

Step 5: Analyze the indicators linked to the volume

Identify volume indicators to help identify market trends. Popular options include:

• On the volume of balance (OBV): calculates the difference between the purchase and sale of volumes

• Accumulation / distribution line (ADLI): indicates when a stock becomes exaggerated or occurring

• Balance volume index (OBI): a weighted sum of the REB lines for a given period

Step 6: View volume trends

Use volume trends. Popular options include:

• Cartography software like tradingView, Thinkorswim or Ninjatrader

• Charts of chronological series with volume data

Volume indicators and other trend lines on a graph.

Step 7: Make informed negotiation decisions

. Take into account factors such as MP:

• Trends linked to volume (for example, increase the levels of Obro or Adli)

• Medium mobile crossroads

• RSI levels

Combine these factors with other technical and fundamental analysis tools to enlighten your commercial decisions.

By following these steps, you can analyze the volume of negotiation for market trends and make information trading decisions.

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