Up Down Volume

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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.

When analyzing volume, it is paramount that you identify the prevailing index trend that dominates a specific timeframe. We strongly believe that an analysis of market prices (index levels) is not complete without a consideration of the associated volume action; conversely, volume data should never be analyzed in isolation. Only a carefully consideration of both factors will give you a clear picture of the current market.

As prices move up or down, we can classify the associated volume for each bar (period) as volume to the up-side (called "up volume") or as volume to the downside (called "down volume"). Below you can see how the settings for up/down volume change the information level on our volume charts:

up/down volume - off

up/down volume - on

When you see a red volume bar, it shows that the index's closing price for that particular bar (period) was LOWER than for the previous bar. Conversely, when a volume bar is colored green, it means that the closing price for that bar (period) was HIGHER than for the previous bar.

In our method of volume analysis, we pay close attention to whether volume surges occurred during price (index) declines or during price (index) increases. Within a given volume surge, we may also determine to what extent volume bars occurred on up or on down volume. Surges in the volume moving average (VMA) act as signals for potential trend changes. By using the up/down volume charting feature, you can easily see what part of a VMA surge occurred to the upside and what part to the downside. Basically, the more red volume bars you see, and the greater their magnitude (i.e., the higher they are), the greater the likelihood the market will reverse direction and start to push higher. This opposite is true for green volume bars.

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