Volume Index

Volume Index is a momentum indicator that gauges the movement of funds into and out of the entire stock market by adding the difference between advancing and declining stocks to a running total.

Study Type: Overlay

Description

By showing the direction of volume flow, the VI is very similar to OBV. The difference between the two indicators is in the actual methods of calculation. VI uses actual up and down volume statistics while OBV generalizes the closing prices of a particular security.

VI can be useful in determining the overall trend and its starting point. Any divergences between the VI and the market index are indicators of a future correction. 

Parameters

• Period: 14 - the number of bars, or period, used to calculate the study.