The Volume Underlay indicator mainly shows the total volume as a bar chart beneath each of the chart’s periods. Unlike the all other indicators that display in a sub-window, the Volume Underlay indicator displays within the actual chart. Before step into the main discussion regarding the specific indicator let’s just have some quick idea about the volume.
Volume in Technical Analysis
During a particular period of time, the total number of transacted shares are represented by the Volume. Buying and selling of a share are considered as one transaction. For example, if in a day, ten transactions happen, then the volume of the day is ten.
The volume as an Indicator
The volume plays a significant role as an indicator. In technical analysis, volume helps to find out the relative worth in a market. Generally, the higher the volume, the higher the market movement. Sometimes, divergence may occur between price and volume, in that case, market trend reversal happens.
If the traders are want to get more details regarding the Volume Underlay indicator, then please open the STUDIES section of Zerodha Kite. The traders are also visiting in Kite mobile App. The Up Volume color is green and the Down Volume color is brown. If you want to change these colors then you can change it. The traders can also check attaching process of the Volume Underlay indicator to Reliance Industries share price chart. This indicator is available includes daily, weekly, monthly or intraday.
Volume is simply the number of shares, contracts, or units changing hands in a given period (day, week, hour). It is reported in real-time (or delayed) with each trade. Markets that do not have trade-by-trade reported volume substitute daily summary data or trade count data. Trending markets should be accompanied by rising volume. Exhausted markets are usually accompanied by falling volume or unusually high volume spikes.
When prices are rising, volume should also be rising. This indicates that more bulls are entering the market and market momentum is strong. If it begins to flatten or fall, a divergence is set up and may indicate that the market is nearing a turning point.
When prices are falling, the converse is not exactly true. Volume can be falling or steady. Typically, market participants are less active in bear markets. If volume begins to increase, it does not signal an immediate reversal, but usually one is near.
Volume can confirm or deny a reversal or breakout condition. If the market registers a one-day reversal on high volume, the change in market trend is likely. Similarly, when the market breaks out of a consolidation pattern on high volume, the breakout becomes more valid.
Volume Underlay Indicator from Upstox
In order to clarify the topic in more detail, we’ve decided to provide examples on the Volume Underlay Indicator from different trading platforms. Here, a chart, derived from Upstox is attached below:
On this chart, have a look at the volume. There the red colored volume represents down-volume while the green one represents up-volume. The volume underlay indicator is equal to the total volume during trading.
Ankita has done her Diploma Engineering in Computer Science & Technology. She is pursuing her degree in Engineering and also well experienced in the equity market and real estate related content writing. She is the one who has developed the technical indicators section of our site.