Volume Tutorial:
Volume
Averaging
Averaged Volume & Summed Volume are ways in which
you can see the volume data. Averaged Volume is set by default and only
applies to periods of 5 days or more. Averaged Volume is always based on
one-minute volume ticks, and means that when you are viewing a 5-day chart
(5-minute bars or ticks) each volume bar is the AVERAGE volume of
FIVE one-minute ticks, or on a 15-day chart (15-minute ticks), each volume
bar represents the average of 15-minutes of volume. Summed Volume uses the
same principles as, Averaged Volume, but here we just add the 1-minutee
volume ticks together and do not average them out.
Below you can see charts of the NASDAQ 100 during the period of
January 11, 2002 to January 14, 2002. The left one uses, Summed Volume,
the right one with Averaged Volume.
NASDAQ 100, 01/11/2002 - 01/14/2002,
VMA 30 min
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Summed
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Averaged
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Those two charts look the same except for one
difference: the vertical volume scale. In the case of Summed Volume we have
1,027,900, and for the same point Average Volume is 205,500.
It really doesn't matter which chart you use, but we
created averaged volume simply to make it easier to correlate 5-day to 60-day
charts with 1-day intraday charts. This way you can select a level of
Volume MA that you think will cause a reversal in the market, and the level
will be consistent over all of the chart views.
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