What Is Net Volume?

Net volume is a technical indicator calculated by subtracting a security's 澳洲幸运5官方开奖结果体彩网:uptick volume by its 澳洲幸运5官方开奖结果体彩网:downtick volume over a specified period of time. Unlike standard volume, the indicator diffe♊rentiates whether the market sentiment is leaning bullish or bearish. Net volume is typically plotted below the price chart with bars for each period indicating the net volume reading for that period.

Understanding Net Volume

Net volume is used by traders to assess 澳洲幸运5官方开奖结果体彩网:market sentiment beyond the use of standard volume. Positive net volume suggests that a security is experiencing a bullish upswing, while negative net volume suggests that a security is experiencing a bearish 澳洲幸运5官方开奖结果体彩网:downswing.

For example, suppose that a 澳洲幸运5官方开奖结果体彩网:thinly traded stock experienced five downward trades at 200 shares a piece, moving down a total of five percent, and one upward trade at 10,000 shares, moving the stock up three percent. The stock may have closed two percent lower, but the net volume would have been a positive 9,000, suggesting that the momentum has really been bullish under the surface.

Here's an example of a chart showing net volume:

Many traders use net volume in conjunction with other forms of 澳洲幸运5官方开奖结果体彩网:technical analysis, including technical indicators and chart patterns, when looking for potential opportunities. For instance, traders might determine that a stock broke out from a key 澳洲幸运5官方开奖结果体彩网:resistance level and then look at net voꦆlume to ༒determine how much buying pressure is behind the move and if there's enough momentum moving forward.

Comparing Net Volume

Net volume is similar to 💟many other momentum indicators that look at volume along with various other factors. Unlike these other indicators, net volume looks exclusively at volume over a single timeframe.

For example, net volume is similar to the 澳洲幸运5官方开奖结果体彩网:money flow index, in that both technical indicators measure market interest in a given security, but the MFI uses both price and volume to measure buying and selling pressure rather than just looking at volume. Net volume is also similar to 澳洲幸运5官方开奖结果体彩网:on balance volume, in that both technical indicators look at volume changes, but OBV adds up volume on up days and down days over time rather than looking at a single period. Other indicators, like the 澳洲幸运5官方开奖结果体彩网:relative strength index, look at the ma📖gnitude of gains or losses to provide insigജhts.

Many traders tend to usꦦe mor🐟e complex momentum indicators than net volume when analyzing opportunities, but it may still play a role in certain cases where the trader needs to only look at a single period.