MARKETVOLUME®

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Technical Analysis

Volume Tutorial


Volume Is A Trader's Best Friend - Volume is a trader's best friend. Few technical indicators give the experienced trader a better feel for the minds of his fellow traders and investors. The heights of their greed, the depths of their fear, the loudness of their panic, and quietude of their ambivalence. All of these emotional states are seen with volume.

Volume also shows us the footprints of big money, and unlike footprints in the sand, these footprints are there for all to see...and long after the fact. More immediate and less ambiguous than any complex indicator, volume pinpoints extreme tops and bottoms -or the areas of them- with amazing accuracy.

Intraday volume helps see where a stock is being repeatedly bought as it dips. Likewise, towards the end of a rally, a wide volume surge 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 timeframe. How can this be? Simple. Volume is simply a measure of sentiment, of human nature. And fortunately for us, human nature is the one ever-present constant of the stock market. Never forget that fact. Once you have your own emotions under control as a trader, knowledge of this profound fact will guide you ever after as reliably as the Northern Star guides a lone sailor across a vast sea. Now you should really be starting to see why volume is a trader's best friend.

MarketVolume® has created volume moving averages (VMA) for all of it's indicators, which range from a period of 5-minutes to 60-days. These VMAs are used to smooth out volume surges so that you can see volume as a trend and not just random surges.

Below is a list of recommended VMA settings for every period in our charts. We recommend these settings because they tend to work the best in showing signals of future market trends.

Recommended VMA settings

PeriodSBV VMA PeriodFast VMASlow VMA1 bar value

Intraday Indicators

2-Hour Period1-20 bars1-20 bars40-100 bars1 minute
1-Day Period5-30 bars5-30 bars60-100 bars1 minute

Short-Term Indicators

5-Day Period7-25 bars7-25 bars70-200 bars5 minutes
15-Day Period7-25 bars7-25 bars70-200 bars15 minutes
30-Day Period7-25 bars7-25 bars70-200 bars30 minutes
60-Day Period7-25 bars7-25 bars70-200 bars1 hour

Mid-Term Indicators

3-Months Period3-8 bars3-8 bars40-80 bars1 day
6-Months Period3-8 bars3-8 bars40-80 bars1 day
1-Year Period3-8 bars3-8 bars40-80 bars1 day
1.5-Year Period3-8 bars3-8 bars40-80 bars1 day
2-Year Period3-8 bars3-8 bars40-80 bars2 days

Long-Term Indicators

3-Year Period3-8 bars3-8 bars40-80 bars3 days
4-Year Period3-8 bars3-8 bars40-80 bars3 days
5-Year Period3-8 bars3-8 bars40-80 bars5 days
7-Year Period3-8 bars3-8 bars40-80 bars7 days
10-Year Period3-8 bars3-8 bars40-80 bars10 days
Weekly3-8 bars3-8 bars40-80 bars1 week
Monthly3-8 bars3-8 bars40-80 bars1 month
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