Volume Price Trend Indicator - VPT
Volume Price Trend Indicator or VPT for short, is one of the simplest financial trending indicators. It is used to determine the balance between the financial instrument's supply and demand. The percentage change of the indicator relates to the supply/demand ratio while the volume itself reveals the magnitude of the changes at hand.
The VPT often spikes up in accelerated trading as when for example a rumor of a stock to go up is being spread. Some trading analysts claim to be banking on that when suddenly members of a given comany begin buying large amounts of their own company's stock. The reasoning there being that they might know something that the general public does not as for example in a case of upcoming positive news about the company to be released or an upcoming merger or acquisition by another company.
Generally Volume Price Indicator is an easy one to use in both offline and online trading. And perhaps because of its simplicity it is appaling to the widest range of traders, both amaterur and professional.
The VPT often spikes up in accelerated trading as when for example a rumor of a stock to go up is being spread. Some trading analysts claim to be banking on that when suddenly members of a given comany begin buying large amounts of their own company's stock. The reasoning there being that they might know something that the general public does not as for example in a case of upcoming positive news about the company to be released or an upcoming merger or acquisition by another company.
Generally Volume Price Indicator is an easy one to use in both offline and online trading. And perhaps because of its simplicity it is appaling to the widest range of traders, both amaterur and professional.
posted by Ramzes at 11:22 AM
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