The percentage volume oscillator (PVO) is the percentage difference between the two sliding average volume. The indicator is calculated using the following formula:
Oscillator volume (%) or PVO = ((12-day EMA level of - 26-day EMA of volume) / 12-day EMA volume) x 100
12-day Exponential Moving Average (EMA) and 26-day Exponential Moving Average has been used as an example. Usually, they can be modified to better meet the longer or shorter periods of time. On the basis of its formula, the indicator PVO is the maximum value of 100, but has no minimum value. For example: if a 12-day EMA is 2000, a 26-day EMA is 8000, the value of the indicator is equal to PVO -300: ((2000 - 8000) / 2000) x 100 = -300. The absolute value is not as important as the direction or crossing above and below the zero line.
Application
The percentage volume oscillator can be used to determine the periods of expansion or reduction in three different ways:
1. The intersection of the median line
Like the price oscillator Interest oscillator volume fluctuates above and below the zero line. When PVO is positive, the short EMA amount greater than the longest amount of EMA. When PVO is negative, short EMA amount less than the long EMA of volume. PVO Values above zero indicate that the volume levels are generally higher than the average value and volume of relatively strong. When PVO is below zero, the volume levels are generally lower than the mean value and the volume relatively low.
2. Directional Movement
The general direction of movement of Interest oscillator volume may offer a quick visual assessment of the volume. Improving the PVO indicator signals that the level of increase, a fall of PVO indicator signals that the volume levels are reduced.
3. The intersection of moving averages
The last variable in the parameters of the indicator is used for forming the signal line. For example: PVO (12,26,9) would include a 9-day EMA indicator of PVO, as well as the histogram represents the difference between the oscillator and its 9-day EMA. When the percentage volume oscillator moves above its signal line, volume levels, in general, are increasing. When the percentage volume oscillator moves below its signal line, volume levels, in general, reduced.
Movement in the percentage volume oscillator is completely separate from the price movements of the market instrument. Also, movements in the PVO indicator may be associated with price movements that provides a measure of the degree of pressure the buyers or sellers. Increased prices, combined with strong performance indicator PVO will be seen as a sign of strong pressure customers. When PVO is reduced, while the price of market-based instruments has fallen, it points to the falling volume at lower and at a very high pressure salespeople. In the example presented above, the pricing schedule "FILE" is shown along with two oscillators percentage of volume, with the following parameters: indication PVO (12,26,9) at the top of the graphics and LED PVO (5,60,1) in the lower part. When the latter variable is set to 1, as is the case with the indicator of PVO (5,60,1), it will not form any signal lines or histograms. During August and September, the share traded in a range between 15 and 21, and indicator PVO remained mostly below zero. There was a small rise above zero, together with shares rising in late August, but the action remained limited to its trading range. When action is beginning to rise from its October level, the indicator PVO moved to positive territory with sharp increases (green line). Increase was confirmed by increasing volume, and the action of the resistance broken. Breakthrough resistance with increasing amount of signal is very strong pressure on buyers.
The use of an oscillator in graphic programs
Typically, graphics programs, the percentage volume oscillator has the option to establish the parameters of the three variables and is presented in the same format as the price oscillator (PPO). Default settings are usually - (12,26,9): The first variable is intended for the short exponential moving average (EMA) of volume, the second - for a long exponential moving average volume, and the third - for the signal line. Signal line is the exponential Moving Average of a direct indicator of the PVO, and can also be made longer or shorter. Histogram (solid area above and below zero) represents the difference between the indicator of PVO and its signal line. For those who do not want to use a signal line or a histogram, a third variable can be set equal to 1.
In the example above, the indicator PVO is located at the top of the graphics settings, the default - (12,26,9) and at the bottom of the parameters (5,60,1). Although the form of lines for both PVO indicator plants are almost identical, right scale reflect the different ranges, and the point of intersection.
• The PVO (12,26,9) exceeded 20 in late October, while the indicator of PVO (5,60,1) exceeded 50.
• In early October (the red line number 1), an indicator PVO 5,60,1) crossed below zero line, while the indicator PVO 12,26,9) stayed above it.
• In early December (the red line number 2), an indicator PVO 5,60,1) moved above zero before this indicator made PVO (12,26,9).
Most of these differences can be attributed to the fourth level of the short EMA in both plants indicator PVO. 5-day EMA volume is much more sensitive than the 12-day EMA of volume. Shorter Moving averages are more volatile and more often will be crossing the median line. Periods of above-average volume may also be confirmed by looking for the volume bars that exceed the 60-day EMA (green oval in October). Please note that both PVO indicator went up sharply in the second half of October, during how long did the volume spike above 60m shares.
Oscillator volume (%) or PVO = ((12-day EMA level of - 26-day EMA of volume) / 12-day EMA volume) x 100
12-day Exponential Moving Average (EMA) and 26-day Exponential Moving Average has been used as an example. Usually, they can be modified to better meet the longer or shorter periods of time. On the basis of its formula, the indicator PVO is the maximum value of 100, but has no minimum value. For example: if a 12-day EMA is 2000, a 26-day EMA is 8000, the value of the indicator is equal to PVO -300: ((2000 - 8000) / 2000) x 100 = -300. The absolute value is not as important as the direction or crossing above and below the zero line.
Application
The percentage volume oscillator can be used to determine the periods of expansion or reduction in three different ways:
1. The intersection of the median line
Like the price oscillator Interest oscillator volume fluctuates above and below the zero line. When PVO is positive, the short EMA amount greater than the longest amount of EMA. When PVO is negative, short EMA amount less than the long EMA of volume. PVO Values above zero indicate that the volume levels are generally higher than the average value and volume of relatively strong. When PVO is below zero, the volume levels are generally lower than the mean value and the volume relatively low.
2. Directional Movement
The general direction of movement of Interest oscillator volume may offer a quick visual assessment of the volume. Improving the PVO indicator signals that the level of increase, a fall of PVO indicator signals that the volume levels are reduced.
3. The intersection of moving averages
The last variable in the parameters of the indicator is used for forming the signal line. For example: PVO (12,26,9) would include a 9-day EMA indicator of PVO, as well as the histogram represents the difference between the oscillator and its 9-day EMA. When the percentage volume oscillator moves above its signal line, volume levels, in general, are increasing. When the percentage volume oscillator moves below its signal line, volume levels, in general, reduced.
Movement in the percentage volume oscillator is completely separate from the price movements of the market instrument. Also, movements in the PVO indicator may be associated with price movements that provides a measure of the degree of pressure the buyers or sellers. Increased prices, combined with strong performance indicator PVO will be seen as a sign of strong pressure customers. When PVO is reduced, while the price of market-based instruments has fallen, it points to the falling volume at lower and at a very high pressure salespeople. In the example presented above, the pricing schedule "FILE" is shown along with two oscillators percentage of volume, with the following parameters: indication PVO (12,26,9) at the top of the graphics and LED PVO (5,60,1) in the lower part. When the latter variable is set to 1, as is the case with the indicator of PVO (5,60,1), it will not form any signal lines or histograms. During August and September, the share traded in a range between 15 and 21, and indicator PVO remained mostly below zero. There was a small rise above zero, together with shares rising in late August, but the action remained limited to its trading range. When action is beginning to rise from its October level, the indicator PVO moved to positive territory with sharp increases (green line). Increase was confirmed by increasing volume, and the action of the resistance broken. Breakthrough resistance with increasing amount of signal is very strong pressure on buyers.The use of an oscillator in graphic programs
Typically, graphics programs, the percentage volume oscillator has the option to establish the parameters of the three variables and is presented in the same format as the price oscillator (PPO). Default settings are usually - (12,26,9): The first variable is intended for the short exponential moving average (EMA) of volume, the second - for a long exponential moving average volume, and the third - for the signal line. Signal line is the exponential Moving Average of a direct indicator of the PVO, and can also be made longer or shorter. Histogram (solid area above and below zero) represents the difference between the indicator of PVO and its signal line. For those who do not want to use a signal line or a histogram, a third variable can be set equal to 1.
In the example above, the indicator PVO is located at the top of the graphics settings, the default - (12,26,9) and at the bottom of the parameters (5,60,1). Although the form of lines for both PVO indicator plants are almost identical, right scale reflect the different ranges, and the point of intersection.• The PVO (12,26,9) exceeded 20 in late October, while the indicator of PVO (5,60,1) exceeded 50.
• In early October (the red line number 1), an indicator PVO 5,60,1) crossed below zero line, while the indicator PVO 12,26,9) stayed above it.
• In early December (the red line number 2), an indicator PVO 5,60,1) moved above zero before this indicator made PVO (12,26,9).
Most of these differences can be attributed to the fourth level of the short EMA in both plants indicator PVO. 5-day EMA volume is much more sensitive than the 12-day EMA of volume. Shorter Moving averages are more volatile and more often will be crossing the median line. Periods of above-average volume may also be confirmed by looking for the volume bars that exceed the 60-day EMA (green oval in October). Please note that both PVO indicator went up sharply in the second half of October, during how long did the volume spike above 60m shares.
stockcharts.com
No comments:
Post a Comment