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Technical Indicators

Thu, Jun 5th, 2025
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The descriptions, formulas, and parameters shown below apply to both Interactive Charts and Snapshot Charts, unless noted. Please note that some of the parameters may be slightly different between the two versions of charts.
Studies noted with * are available only in Snapshot Charts and those noted with ^ are available only in Interactive Charts.
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Volume Oscillator

Indicator Type: Standalone - Interactive Charts Only

A volume oscillator measures volume by measuring the relationship between two moving averages.

The volume oscillator indicator calculates a fast and slow volume moving average. The difference between the two (fast volume moving average minus slow volume moving average) is then plotted as a histogram. The fast volume moving average is usually over a period of 14 days or weeks. The slow volume moving average is usually 28 days or weeks. Analysts regularly argue about the applicability of these time periods -- some say that 14 and 28 are too conservative, while others argue these numbers are not conservative enough.

Here we use 5/10, as would a short-term trader. The histogram, like an oscillator, fluctuates above and below a zero line. Volume can provide insight into the strength or weakness of a price trend. This indicator plots positive values above the zero line and negative values below the line. A positive value suggests enough market support exists to continue driving price activity in the direction of the current trend. A negative value suggests a lack of support, indicating that prices may become stagnant or reverse.

Interpretation

The volume oscillator should rise in a rallying market. When an issue becomes overbought, the oscillator will reverse its direction. When the market declines or moves in a horizontal direction, the volume should contract.

Always keep in mind that changes in volume are being measured, and volume expands during a sell-off. It is important to note that an increasing price, together with declining volume, is always, without exception, bearish. When the market is at the top, one would, therefore, expect to see an oversold volume chart. Another important point: rising volume, together with declining prices, is also bearish.

Source: Investopedia.com

Parameters

Period1: Default value = 5
Period2: Default value = 10

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