Definition: Volume ratio can be obtained in a similar way to RSI. Volume Ratio (%) = 100 - 100/(1+vr) The parameter "vr" is defined as vr=(A+U/2)/(D+U/2)
A=Total volume of the periods when the price advanced D=Total volume of the periods when the price declined U=Total volume of the periods when the price unchanged
After substitution, following expression can be derived and the denominator represents total volume of all periods. Volume Ratio (%) = 100 x (A+U/2)/(A+D+U)
Notes: A similar method to interpret RSI can be employed. 1) Overbought level over 70% and oversold level under 30%. These levels need to be adjusted according to the periods, time frames and issues. 2) Bullish picture over 50% line and bearish picture under 50% line. 3) Crossing oversold level to the upside can be taken as a confirmation of bullish reversal. - and vice versa for a bearish reversal. 4) After a long-term bearish market, the increase of volume can happen in the early stage of a bullish market. 5) Buying opportunity can be suggested when the volume ratio is declining and the price is either advancing or leveling off.
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martym55417
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This is great, Anybody convert this to trade ideas scanner?
stokedstocks
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Very Cool , Thanks
UnknownUnicorn5276441
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Appreciate your work!
Daniel_666
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May I know why the configuration number is 25? Is it only valid for the US stock market or US products?
How about for the FX, Gold and other markets?