CandleFocus Glossary Editor
Up volume is a term typically used to describe an increase in the number of shares or contracts that are traded in a given period of time for a particular security. This increase, along with a corresponding increase in the security’s price, suggests that there may be a shift in sentiment toward a more bullish or positive mindset. Up volume is typically associated with a so-called “bull market,” a market in which investment values and options of all types are likely to rise, though there are some exceptions.
Positive and negative volume indexes help to keep track of up volume as well as down volume, so that investors and analysts can attempt to identify shifts in momentum and possible future market direction. The volume index measures the increase or decrease in total number of shares traded over a particular period of time, while the price index provides further information on the price movements of those same securities. Applying these indexes to the up volume of a security can provide a sense of whether the increase in price is due in part to actual increased investment by buyers, or whether it is simply the result of a temporary surge in demand.
A rise in up volume, therefore, is often seen as a legitimate indication of a shift in sentiment toward a more bullish or positive outlook. A security reading of +1000 up volume or above is a particularly clear confirmation of the shift in sentiment toward a more positive one. However, experienced traders and investors will also look for other indicators beyond the positive and negative index readings, such as closing prices and news events related to the security, to make sure that the surge in up volume is not simply a short-term reaction to a particular event, news item, or random move by a significant market player.
Up volume is an important measure for professional investors and traders because it offers insight on whether the current market sentiment is likely to be reflected in rising prices over a longer time frame. It provides useful information to those interested in potentially investing in or trading a certain security, as it is an indication of an upward shift in sentiment towards that security. Anytime the up volume in a moment is accompanied by a rise in the security’s price, it is likely an indication of a more bullish trend.
Positive and negative volume indexes help to keep track of up volume as well as down volume, so that investors and analysts can attempt to identify shifts in momentum and possible future market direction. The volume index measures the increase or decrease in total number of shares traded over a particular period of time, while the price index provides further information on the price movements of those same securities. Applying these indexes to the up volume of a security can provide a sense of whether the increase in price is due in part to actual increased investment by buyers, or whether it is simply the result of a temporary surge in demand.
A rise in up volume, therefore, is often seen as a legitimate indication of a shift in sentiment toward a more bullish or positive outlook. A security reading of +1000 up volume or above is a particularly clear confirmation of the shift in sentiment toward a more positive one. However, experienced traders and investors will also look for other indicators beyond the positive and negative index readings, such as closing prices and news events related to the security, to make sure that the surge in up volume is not simply a short-term reaction to a particular event, news item, or random move by a significant market player.
Up volume is an important measure for professional investors and traders because it offers insight on whether the current market sentiment is likely to be reflected in rising prices over a longer time frame. It provides useful information to those interested in potentially investing in or trading a certain security, as it is an indication of an upward shift in sentiment towards that security. Anytime the up volume in a moment is accompanied by a rise in the security’s price, it is likely an indication of a more bullish trend.