The gap between a short and a long volume moving average, divided by the long one and shown as a percent. It measures the momentum of volume itself, asking whether a price trend is backed by real participation.
The Volume Oscillator (VO) measures the momentum of volume itself.
It ignores price entirely. It looks at one thing only: is there more volume now, or was there more before?
The mechanism is almost disappointingly simple. Draw two moving averages of volume — a short one and a long one — and take the difference between them. When the short average sits above the long, volume is expanding right now. When it sits below, volume is fading.
Where OBV and Chaikin Money Flow ask which way the volume went, the Volume Oscillator asks not direction but the momentum of quantity. It makes no judgement about buying versus selling. It answers one question: is the market's attention heating up, or cooling down?
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NASDAQ:AAPL
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