103-03 Stock Charts Using Volume

The use of volume in technical analysis is essential as volume allows us an insight into the supply and demand situation.  The following charts incorporate volume into the price window to provide additional information.

Price at Volume Chart

Price at Volume Indicator on a Candlestick Chart
Price at Volume Indicator on a Candlestick Chart

The price at volume chart is an exciting new development, as instead of showing volume for a certain period, it shows us the volume of trades at a specific price level.

This enables us to see at what price level most of the market participants believe the stock is reasonably priced.

Positives

Innovative and intuitive, this charting method combined with standard volume bars can enable you to see market psychology both in time and price.  It is also easy to see volume increasing as price rises; this is a very bullish sign.

Negatives

Not all stock charting packages offer this type of indicator

EquiVolume Stock Charts

Equivolume Chart - Stock Market Analysis
Equivolume Chart – Stock Market Analysis

EquiVolume attempts to provide the solution of Volume at Price differently.

Instead of plotting volume in separate bars, it is incorporated into the price bars themselves.  The wider the price bar, the more shares were traded during that period.

Positives

Visually impressive and extremely easy to interpret.

Negatives

This type of chart can distort the timeline running across the bottom of the chart.  This makes drawing accurate trend lines more challenging.  Only a few stock charting service providers offer EquiVolume.

For example, the beginner should stick to the more mainstream chart format, OHLC.

Stock Volume: How to Use Volume in Charts Like a Pro

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