Table of contents

Volume Indicators

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Table of contents

Volume Group

This group of indicators looks at volume with the view to providing clues as to the reason why certain price movements occurred and a clue as to the future price action.

The basic premise behind volume indicators, is that volume precedes price. Most volume or money flow indicators are designed to identify early increases in positive or negative volume flow to gain an edge before the price moves. The terms "money flow" and "volume flow" are essentially interchangeable.

For example, often just before a security's price advances, there will be period of increased volume of trade in that security.

Basically, volume is the total number of units traded in that particular instrument in a day. Naturally one can change the period over which volume is calculated with the normal calculations based upon daily, weekly, and monthly periods. With the aid of computers volume can even be calculated over any desired period.

Volume Indicators include:

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