Top Three Indicators That Gives You Accurate Indication about the Direction of the Market
Stock volume is the number of stocks traded during a given time period. The volume represents the interest level in a stock. Volume is simply the amount of stocks that trade from sellers to buyers as a measure of activity. Let us understand with the help of this small example that if a buyer of a stock purchases 100 stocks from a seller, then the volume for that period increases by 100 stocks based on that transaction. It is a very powerful tool, but it is often ignored because it is a simple indicator. Many traders know how to use volume in order to increase their profits and minimize risk. Volume is the total number of shares traded within a specified timeframe. Volume slowly increases in the direction of a trend. A volume point can indicate the end of a trend. There are three primary volume indicators: The function of on balance volume is to measure positive and negative volume, displaying it in graph form so that the trader can determine if money is flowing into or out of a stock. Accumulation line/distribution line is to measure money flow into and out of stocks. The difference between On Balance Volume and Accumulation/Distribution line is, it takes the opening and closing prices into the calculation. This figure is then plotted in line graph form, similar to the On Balance Volume indicator. Ease of Movement indicator reflects the amount of volume that is required to move price. It was developed to show the relationship between volume and price change and it is plotted on a graph with a midpoint of zero. When the price is moving up on light volume, this indicator shows high values above zero. When the price is moving, the downward low volume is shown. If it takes lots of volumes to move price, the indicator stays near zero. This technical analysis helps in upholding accurate tips. Advisory firms widely practice this technical analysis. Money Classic Research hires experts and generates accurate tips in stock market.