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Mastering Divergence With the VOLD Indicator When it comes to understanding market internals, one tool often overlooked but incredibly effective is the VOLD indicator. VOLD, short for volume-on-advance vs. volume-on-decline provides, a clear picture of market breadth by calculating the volume flowing into stocks that are moving up versus those moving down. It’s an essential part of my trading toolbox, especially for identifying divergences that often lead to key turning points in the market. Here’s the gist… When the S&P 500 (SPY) moves in one direction and VOLD moves in the opposite direction, it’s time to pay attention. This divergence can signal that a current trend is losing steam or that a reversal may be on the horizon. The beauty of VOLD is its simplicity — it’s not about overloading charts with unnecessary noise but about focusing on a metric that works. On Thinkorswim, you’ll find the VOLD indicator labeled as $VOLD. On other platforms like TC2000, it might be listed under a slightly different name, but the core concept remains the same. Volume and Price The indicator tracks volume patterns and compares them to price action. For example, if SPY is climbing but VOLD is trending down, it’s often a sign of underlying weakness in the market. Conversely, when VOLD trends up while SPY trends down, the bulls may have a case to make. It’s important to note that this indicator is best used intraday. I prefer 5-minute time frames — it’s short enough to capture the nuances of volume shifts without overcomplicating the picture. The key is to look for significant divergences. Minor fluctuations between SPY and VOLD aren’t worth chasing, but when the divergence is clear, it can provide actionable insights. Some traders mistakenly compare VOLD to on-balance volume (OBV), but they’re not the same. OBV measures cumulative volume changes based on price movement, while VOLD focuses purely on the net volume difference between advancing and declining stocks. This makes VOLD particularly useful for spotting moments when the broader market’s strength — or weakness — doesn’t align with price action. Another great feature? You don’t need to buy anything to use it! Most major trading platforms include VOLD or its equivalent, so it’s accessible to anyone willing to spend a little time learning how it works. And trust me, it’s worth the effort. If you’re serious about trading, mastering market internals like VOLD is non-negotiable. It’s not about reinventing the wheel — it’s about leveraging tools that give you an edge. Start by adding VOLD to your charts, keep an eye on those divergences, and see how this powerful indicator can sharpen your market insights._________________________________________________24 FOR 24 on Trade Alerts in the Last 7 Months! It’s all thanks to one simple pattern-based indicator... Right now, I’m eyeing up what could be the 25th win in a row. Target the Next One With Us Here!_________________________________________________Follow along and join the conversation for real-time analysis, trade ideas, market insights and more! Telegram:https://t.me/+_vmfwkeP8fA5YWQ5 *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.Join the Conversation Give us a follow on your social media platform of choice, and make your voice heard! |
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