Coding Volume

Thursday, Feb 28 2019 by
4

Hi,

I’ve heard the term, going up on higher volume a lot and just wondering if there’s a short cut rather than looking at the charts. Below is a list of a few companies, with the 52 low date, sum of % gain days with volume* and sum of % loss days with volume*.  *From the 52 low date.

5c7809ca7fc1bScreenshot_2019-02-28_at_16


Question is - does the sum of the up days and down days show anything useful? Or is it more about the spikes in volume rather than the sum?

I would usually do a complete data back test of this but i feel like the stockopedia community can do better, so if anyone has suggestions on how to code something better - please let me know!

Thanks

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2 Posts on this Thread show/hide all

HumourMe 28th Feb 1 of 2

The way I understand it is:

A spike in volume should be associated with a corresponding change in price. If it isn't, it is a sign of supply/demand being balanced, which is bad news for subsequent change and may herald a reverse of trend if supply/demand is exhausted. In an uptrend this is interpreted as potential 'distribution'. If a downtrend it may signal the bottom, especially if supply dries up.

I'm sure there are other interpretations, however, I think that large volume seems to herald either continuation or reversals, depending on the corresponding period price change.

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AnonymousUser605348 1st Mar 2 of 2

The one and only technical signal that still has value for me is lower lows on lower volume. A succession of these, near 26-52 week lows is a reasonable indicator of a downtrend ending, if not a turn to the upside.

Having said that I'd say you really should look at the chart. If there is big volume at a certain price, which you didn't see because you didn't look at the chart, I personally think it will alter your view of subsequent trends in volume (for the worse). Volume Profile is worth looking at. It's a little less subjective and really highlights "key levels".

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