Up/Down Volume Indicator | Indicator Series

Up/Down Volume Indicator is a type of indicator that indicates whether the price of an asset is increasing or decreasing. The indicator is used to measure volume and volatility in the stock market.

How Does it Work

It consists of two horizontal lines above and below a bar: one at the top Up Volume Indicator and another at the bottom represents Down Volume Indicator. The Up Volume Indicator shows when the price went up, while Down Volume Indicator shows when the price went down per the volume over a timeframe. The results are then expressed on a histogram with up volumes above zero and down volumes below zero mark. (Play around with tradingview’s advanced charts for free).

In short, it helps in identifying trends and volatility of stocks. Beginners, as well as professionals, can use it.

The main features of this indicator are:

  1. It can be used for both long and short timeframes.
  2. It gives an idea about how active the traders are in a particular stock/market.
  3. It gives you an idea about support and resistance levels in your chosen stock/market so that you can make better trades based on it.


Uses of Up/Down Volume Indicator

This indicator has two main uses:

  1. Trading – If you’re looking to buy or sell a stock, using an Up/Down Volume Indicator can help you determine when it’s time to buy or sell.
  2. Investing – If you’re investing in stocks, an Up/Down Volume Indicator can help you determine if your purchase was profitable and alert you if the market has changed its opinion of a company’s value.
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Benefits of Up/Down Indicator

  • It allows you to see how prices are moving over time so you can make better decisions based on information about how they are trending. 
  • It also gives you an idea of what direction prices might be moving in next and if there’s room for additional upside or downside risk before making a trade or investing decision based on this trend analysis (i.e., buying low and selling high).

Limitation of Up/Down Indicator

The up and Down Indicator doesn’t take into account how much money changed hands during each transaction; therefore, it doesn’t show changes in value over time.

Up/Down Indicator is one of the most accurate indicator in trading. Use it alongside other indicators such as the Moving Average Convergence/Divergence (MACD) for more accurate results.  Subscribe to tradingview.com and join other traders in the discussion.