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Technical Analysis Explained, Fifth Edition: The Successful Investor's Guide to Spotting Investment Trends and Turning Points, 5th Edition by Martin J. Pring

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26 VOLUME II: VOLUME INDICATORS

Chapter 7 outlined some basic principles for interpreting volume. Now we will explore several volume indicators that can be applied to any security, finishing up the discussion with volume indicators that are more suitable for analyzing markets as a whole.

Rate of Change (ROC) of Volume

Normally, volume is displayed as a histogram underneath the price. A quick glance at any chart often reveals a noticeable increase in the size of the volume bars that are associated with breakouts, selling climaxes, and so forth. This is all well and good, but occasionally there are subtle shifts in the level of activity that are not easily detectable by this method. By massaging the volume data with an ROC calculation, it is possible ...

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