The volume index consists of a volume column and three simple average lines, and the height of the column indicates the total volume of the day. In the vol indicator, there are three moving averages. These three simple average lines represent the average turnover of 5 days, 10 days and 20 days respectively. The trading volume column lines are represented by red columns and green columns. There are many situations in which the vol indicator is used, but the stock market is not absolute. Investors need to combine other indicators and market environment for analysis.
Parameter setting of volume indicator:
The principle of VOL index is the same as that of the average price line we often use. VOL index reflects the main trend of market turnover in a certain period, and plays an important auxiliary role in judging and matching with the moving average of stock price. It is the initial rising period, main rising period or final rising period of current stock price, and it is also the future trend of stock price change.
When analyzing the VOL indicator on the daily line, the commonly used parameters are the 5-day, 10 and 20-day moving averages.
Skills of using VOL index:
In the volume chart with moving average, we can see that the moving average moves back and forth between the histogram of volume, thus stirring the trend of price change. At the beginning of the rising market, the EMA kept hitting new highs with the price, showing the gathering process of market sentiment. When the market came to an end, although the price hit a new high, most of the moving averages fell and weakened, leading to the separation of volume and price. At this time, the market's willingness to follow up has changed, and the price is close to the peak area.
At the beginning of the decline. The moving average generally continues to fall with the price, indicating that the market sentiment is slack and weak. When the market draws to a close, the price keeps falling to a new low, the moving average is flat, or there are signs of rising. At this time, the price has bottomed out, so you can consider waiting for an opportunity to buy.
For the volume chart with two moving averages, when the 10 moving average is above the 30-day moving average and continues to rise, the market will keep rising; Conversely, when the 10 moving average continues to fall below the 30-day moving average, it indicates that the decline will continue. The moving average, whether turning up or down, indicates that the market may turn around and is an early warning signal.
When the 10 moving average crosses the 30-day moving average and a golden fork or a dead fork appears in the moving average theory, it is the confirmation of the market turning trend. At this time, it is necessary to judge together with other technical indicators and make favorable investment choices. In the market, the 10 moving average and the 30-day moving average are intertwined, and finally the 10 moving average breaks through the 30-day moving average upward or downward, which can indicate that the market breaks through the market direction and is a more accurate auxiliary signal for breakthrough.