Trading Volume

A third measure of the strength of the market is to look at the trading volume, and we do this by looking at the volume in advancing issues and the volume in declining stocks. This is called the upside volume and the downside volume. These can be shown as two separate lines, but in the case of ShareScope the indicator is a cumulative one, taking the difference between upside and downside each day and adding it to the previous day’s value. Once more, the absolute value depends where you start, and so is not relevant, but you are comparing the ups and downs of the indicator to the market index.

When the upside volume is strong, and the index is rising, this indicates that the market is strong. If the index is falling, then the market is weak.

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