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When analyzing volume, it is very important to know the price trend during specific time frames. We strongly believe that the market price cannot be easily analyzed without volume in technical analysis. Likewise, volume cannot be easily analyzed without price. Only by analyzing each factor that affects market trend can you get a clear picture about the current market situation in real time.

Below you can see some close-ups of charts with different settings for up/down volume:

up/down volume - off price - line	Up/down volume - on price - line
up/down volume - on price - bar

When there is a red volume bar, it simply means that the close price for the index was LOWER than the previous close price. Conversely, when the volume bar is green, it means that the close price for that period was HIGHER than the previous close price.

Generally, when there are numerous red volume bars (volume that occurs as the index is moving down) small investors are selling, and large institutional investors are buying up the shares that small investors are selling. Once volume of this nature has peaked, the index generally begins to reverse and move up again. Likewise, when the index is moving up and the volume bars are green, that means that institutional investors have begun to sell their shares. It is generally the small investors who end up buying them, as they are hopeful the stock market will continue to move higher.

In volume analysis, the VMA surge acts as a signal for a change in the index. By using the up/down volume charting feature, you can easily see what part of the VMA surge is to the upside and what part is to the downside. Basically, the more red volume bars you see, and the higher the red bars are, the more likely it is for the stock market to reverse its direction and move up. This is conversely true for green volume bars.

NEXT: Upside/Downside Volume

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