S&P
500:
Examples For Long-Term Traders
The following example illustrates a practical application of the
MarketVolume® technology. Using our charts, traders can see the relationship
between index prices and volume.
The above chart was created using our
JavaVolume® charting technology, which enables you to anticipate future
price movements and trend changes. The blue line in the chart is a volume
trend line, called a Volume Moving Average (VMA).
The JavaVolume® charts plot volume data and index
prices in real time. On the charts, you can also display a volume moving
average, index moving averages, up/down volume, as well as numerous other
features. You may also draw trend lines directly onto the charts.
The chart above illustrates the relationship
between price and volume over the long-term. Notice how an increase in
volume subsequently affects price movements and how it leads to a change of
direction (trend reversal). You can see the volume surges in the S&P 500 index
and the associated reversal points very clearly. Knowledge of this principle
would have allowed you to anticipate coming trend reversals early on.
You can see that practically every time the
Volume Moving Average peaks, the index reacts with a directional change. Knowing
this, one can make numerous profitable trades.
Traders will find further information about this topic in our
Chart School.
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