Nice Stock Volume In 2-D

By JulinaLePaintz on January 20, 2011 In Arts and Entertainment





Most traders and technical analysis are really familiar with a classic stock graph. An average stock chart usually has a stocks value on the vertical axis, time on the horizontal axis, and transactions below. This usually creates the appearance of 2 separate and distinct chart areas. Stock price movement is on the top of the chart and volume is on the lower part. Although this is a very frequent configuration, there is an additional method that combines the 2 into a very simple looking display called Equivolume graphing made famous by Richard W. Arms.

Equivolume displays the two into an united simple chart. Instead of looking up and down on a graph to display the combined display into one chart, volume is mixed within the price bar. The new bar is represented as the price as being the vertical high/ low and the width of the bar as the volume. This creates several different looking squares and rectangles. Some look like bony vertical rectangles (little volume, huge price range), huge horizontal rectangles (huge volume, little price range), or any combination in between. This visual look gives a more 2-D correlation of price and volume.

Having a two-D stock chart look is very attractive. It makes it so that an investor can look at a chart easier and faster with a glance. Instead of looking at the stock price chart and then looking lower at the volume to see how it correlates, an investor only has to look at one chart. This saves valuable time during research hours. Investors can easily spot traditional stock patterns with the new detail of volume within the chart. There are various free charting sites out there that have this “Equivolume” type.

Equivolume adds a very simple charting display to stocks. It also makes it quite nice on the eye so that a stock can be looked at quicker. Overall, stock traders should take a look at Equivolume to see if they like it’s simple use.

Julina LePaintz writes about the financial markets and trading ideas . She also writes about some of the investment compliance problems of the week. On her time off she hops on the beach, works out at the gym, and does yoga.