PVO

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Patent #: US 7,831,984 B2
MarketVolume®'s technology of displaying and presenting intraday volume and volume based technical indicators is protected by copyright law and patent. Unauthorized distribution or reproduction of proprietary technologies will be prosecuted to the maximum extent possible under the law.

The volume oscillator measures the relationship between 2 volume moving averages (VMAs), showing the divergence between two 2 VMAs with different settings. We call the shorter-term VMA the "fast VMA" (VMA1 on IV chart); the longer-term VMA is called the "slow VMA" (VMA2 on IV chart).

We are the only source who provides percentage volume oscillator for U.S. indexes and exchanges on daily and intraday level which allows to use it in the S&P 500, Russell 2000 and other indexes technical analysis and market timing.

The formula for calculating the volume oscillator is:

Volume Oscillator = [Fast VMA] / [Slow VMA]

Accordingly, a percentage volume oscillator (PVO) can be derived from the above formula; it is calculated as follows:

PVO = ([Fast VMA] - [Slow VMA]) / [Slow VMA] * 100%

The VMA itself shows the average volume over a specific timeframe. By calculating and charting the difference between a slow and a fast VMA, you can determine the extent to which the fast VMA trades above or below the slow VMA. This provides an indication of the intensity of short-term trading activity compared to the average trading activity over a longer time span.

The volume oscillator allows a mathematical evaluation of volume surges. Using this tool, you can gauge the impact a volume surge might have on the market. Large positive oscillator values are indicative of significant volume surges. If such volume surges occur while an index is trending higher, they are by our definition buying or bullish volume surges. Conversely, if such volume surges appear during a bearish market, we call them selling or bearish volume surges (for further details on these definitions, please refer to our Chart School). By further analyzing the corresponding volume oscillator values, traders can evaluate to what degree a particular surge is likely to impact the market - over the short-, mid-, and long-term.

Trading strategies based on PVO

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