The Volume Oscillator (VO) identifies trends in volume using a two moving average system.
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The Volume Oscillator measures the difference between a faster and slower moving average (MA).
- If the fast MA is above the slow MA the oscillator will be positive.
- If the fast MA is below the slow MA then the oscillator will be negative.
- The Volume Oscillator will be zero when the two MA's cross.
- Rising volume (positive VO) signals a strong trend.
- Falling volume (negative VO) indicates trend weakness.
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Coca Cola Corporation with Volume Oscillator.
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Price forms a flag pattern after a strong up-trend. Volume declines on each trough and rises on each peak, suggesting an upward breakout.
- The breakout above the resistance line is then confirmed by a sharp rise in volume.
See Indicator Panel for directions. The default Volume Oscillator settings are:
- Fast MA - 5 days
- Slow MA - 10 days
- Exponential moving averages.
To alter the default settings - Edit Indicator Settings.