Volume Momentum

Last modified 13:01, 28 Sep 2012

Volume Momentum

Volume Momentum is calculated by finding the difference between the closing prices of two successive intervals, and applying that amount as a multiple to the second interval's volume.

In this way both the direction (+ up or - down) of the price movement for the interval, and the magnitude (in terms of both overall price movement as well as volume of trade) of the movement can be plotted. An overall indicator of the interval's directional momentum will result.

The formula for calculating the Volume Momentum for a particular interval is as follows:


The resulting amount is plotted in its own indicator window below the price chart.

As the figure is either positive or negative, it oscillates above and below zero level on the y-axis.

This indicator can be effectively displayed as a line, histogram or step.

User Settings

There are no user defined parameters for the Volume Momentum calculation itself, however users do have control over various aspects of the indicator's visual display.

The Style selected for the plot can be one of the following: Solid, Dashes, Dots, Points, Histogram or Step.

The plot can be set to be displayed inverted. When this setting is turned on, a small Inv icon will appear in the Volume Momentum's scale (Y-axis).

Once the style is selected the Color, Weighting and Visibility can also be controlled from this page.

The Scale's display is controlled from the Scale Settings and Scale Appearance tabbed pages.

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