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The server uses volume in a number of important ways.
For much of our analysis, we must combine price and volume to establish the normal baseline for a stock.
As a simple example, we notice that most stocks trade a lot more near the open and the close.
They trade the least during the middle of the day.
We are not surprised when a stock price moves a lot during these high volume times.
We are more concerned with the consistant or sudden moves during times when the stock is typically quiet.
Our proprietary models are very similar to viewing a stock on an equi-volume chart.
This gives us a better view of what is commonplace vs. what is unusual and worth reporting.
The true value of volume analysis comes into play when we look at the volume inside of the candlesticks.
If you look at the highs of these candlesticks you might think that they define a good resistance line.
By examining all of the prints, you can see that the highs were just a few random outliers.
Our server uses statistical analysis to determine the right place to draw resistance and it examines each print because candlesticks can be misleading.
We can also look at volume independent of price.
One of our most powerful filters is current volume.
This compares the total volume so far today to the average amount of volume for this stock at exactly this time of day.
The time is precise to the second, although we do some smoothing of the historical data.
The high relative volume alert is similar, but it looks at a shorter time frame, usually 10 minutes or fewer.
This allows you to find unusual volume spikes.
The % volume filters and the strong volume alert allow you to compare the current volume for today to the average volume for an entire day.
The strong volume alert is similar to the high relative volume alert, but the strong volume alert works better on larger, longer term patterns.
Today's volume is a special purpose filter used for certain trading strategies.
It only looks at today's volume.
We generally recommend our other alerts and filters because they compare a stock to a historical baseline.
The daily volume and dollar volume filters only look at historical values.
This allows you to tell the server the types of stocks that you normally like to trade. You can combine these with other types of alerts and filters.