Investing with Volume Analysis: Identify, Follow, and Profit from Trends

10. Pure Volume Indicators

“Most people look at the price of their stock and don’t pay much attention to volume. But volume is a crucial component of the measure of supply and demand. When you have major volume coming into a stock, it tells you there are important players involved. So, yes, we look at volume very carefully.”

—William J. O’Neil

Pure volume indicators are simply that; they use volume only in computations. Although volume information can be used alone, it is best used with price information.

Volume

On most charts, volume is depicted over time on a horizontal axis as a vertical line bar directly below the corresponding price bar. This allows for easy comparisons between the day’s volume bar and the corresponding price bar directly ...