Uptick volume is a volume of stocks, which are traded when the price of the stocks are rising. All the trading strategies, which are based on the trends, make use of the uptick volume. However, the difference between the uptick volume and the downtick volume is known as money flow. The investors trade those stocks, which are having positive momentum at an increasing uptick volume. At this moment, the present trading prices are above the average price of the stock. The uptick volume is usually used in the momentum trading. There is more demand for buying the stock when there is an increase in the ticks. Technical analysts based on this tool take the decision of buying and selling of the stocks. And hence are able to produce accurate intraday trading tips.
Volume analysis is the method of reviewing the strength of a trend, based on volume activity. In the market Volume is one of the oldest day trading indicators used by market technicians. Apart from technicians, market fundamentalists also consider the volume or the number of shares traded for a given security.
Thus, it can be concluded that the volume indicator is one of the simplest methods for observing the buying and selling activities of a stock at important levels. However, the most tricky part is that a volume can provide conflicting messages for the same setup. Still, the deciding factor to turn a profit in the market can be calculated based on your ability to judge what the volume is telling you in combination with price action.
The volume is a very powerful tool, but many traders and technical analysts do not use it, as this is a simple indicator. Still, many traders believe the strength of using the volume indicator and use it to get maximum profit. In fact, the volume is the most popular indicator used by the technicians. Volume is a tremendously valuable tool and is used in different ways. The few common volume-based indicators are (OBV) On Balance Volume, Chaikin Money flow, and Klinger Volume Oscillators
Chaikin Money Flow is frequently used as a short-term indicator as it oscillates. However, the Chaikin Money Flow is used to determine the divergence. The indicator focuses when the price of stocks if they end at high or low of their daily range then the volume is increased. Once the volume is increased, the value of resultant strength is calculated. The volume is evaluated to be high when the volume is expanding and the price of stocks closes at the upper portion of the range. The volume is at low or negative when the price of the stocks closes at the lower portion of the range.