Volume is simply the number of shares that have been traded over a given period. In turn, the Volume Oscillator identifies volume trends by using a Fast Moving Average (typically a 28 day/weeks MA) and a Slow Moving Average (typically 14 days/weeks MA). Their difference is then plotted as a histogram. These settings can be adjusted in the Volume Oscillator settings modal.
Using the Volume Oscillator to confirm price trends:
- When the Fast Moving Average is higher than the Slow Moving Average, the Volume Oscillator will be positive. This could signal a strong price trend.
- When the Slow Moving Average is higher than the Fast Moving Average, the Volume Oscillator will be negative. This could signal a weak price trend.