Volume represents the total number of shares or lots traded in a security within a specific timeframe. Analyzing volume data helps traders assess price action, identify trends, and execute high-probability trades. Below, we explore the top 5 volume indicators in TradingView to enhance your technical analysis.
Why Volume Matters
High Volume: Indicates strong buyer/seller interest.
- Uptrend + Rising Volume = Continuation likely.
- Downtrend + Rising Volume = Downtrend may persist.
Low Volume: Suggests weak momentum.
- Uptrend + Declining Volume = Potential reversal.
Best Volume Indicators in TradingView
1. On Balance Volume (OBV)
A momentum indicator tracking cumulative buying/selling pressure by adding volume on up days and subtracting on down days.
Developed by: Joe Granville.
Interpretation
Trend Confirmation:
- Higher highs + Rising OBV = Uptrend.
- Lower lows + Falling OBV = Downtrend.
- Divergence: Price-Volume mismatch signals reversals.
2. Money Flow Index (MFI)
A volume-weighted RSI alternative (0–100 scale) measuring buying/selling pressure.
Interpretation
Overbought/Oversold:
- MFI > 80 = Overbought (Bearish reversal expected).
- MFI < 20 = Oversold (Bullish reversal expected).
Divergence:
- Price ↗ + MFI ↘ = Bearish.
- Price ↘ + MFI ↗ = Bullish.
3. Volume-Weighted Moving Average (VWMA)
A moving average incorporating price and volume.
Interpretation
Trend Identification:
- Price > VWMA = Uptrend (Go long).
- Price < VWMA = Downtrend (Go short).
- Support/Resistance: VWMA acts as dynamic S/R in trends.
4. Accumulation/Distribution (A/D)
Tracks supply/demand via volume-price trends.
Interpretation
Trend Continuation:
- Rising A/D + Rising Price = Bullish.
- Falling A/D + Falling Price = Bearish.
- Breakouts: A/D spikes hint at accumulation (bullish) or distribution (bearish).
5. Price Volume Trend (PVT)
Measures trend strength via cumulative volume-price alignment.
Interpretation
- Confirmation: Rising PVT + Rising Price = Strong uptrend.
Divergence:
- Price ↗ + PVT ↘ = Bearish.
- Price ↘ + PVT ↗ = Bullish.
FAQs
1. Which volume indicator is best for beginners?
OBV—simple, effective for trend confirmation.
2. Can volume indicators predict reversals?
Yes, via divergence (e.g., MFI/PVT vs. price).
3. How do I combine volume indicators with other tools?
Pair with moving averages or RSI for confluence.
4. Does high volume always mean a strong trend?
Only if price aligns (e.g., uptrend + rising volume).
5. Are volume indicators reliable in low-liquidity stocks?
No—stick to high-liquidity securities.
👉 Master TradingView Indicators
Key Takeaways
- Use OBV/MFI for trend/divergence.
- VWMA/A/D excel in trend confirmation.
- PVT quantifies trend strength.
- Combine with price action for robust strategies.
Pro Tip: Always backtest indicators in TradingView’s strategy tester before live trading.