Volume Rate of Change - online forex trading exchange rates

Overview:

The Volume Rate of Change indicator steps the portion change of current volume as contrasted to your amount a specific number of periods ago. The quantity Rate of Change indicator may be used to verify price techniques or detect divergences. The formula for Volume Rate of Change is expressed below:


    [(Current Volume / Volume n durations ago) - 1] x 100

Generally speaking, the quantity price of Change is calculated according to 14-periods for input n, but needless to say can be modified to any investor preferred period. A chart of the 100 ounce Gold futures is shown below with the 14-day Volume price of Change indicator:

As the cost of Gold was increasing, the Volume price of Change indicator had been increasing as well, showing that there clearly was buying interest as prices had been increasing. Whenever Gold broke above trendline opposition, the quantity price of Change indicator surged greater, showing that purchasers were exceptionally interested in buying Gold.

Using volume to verify price analysis can help an investor make better trading decisions.