{"id":36272,"date":"2022-12-16T10:59:30","date_gmt":"2022-12-16T15:59:30","guid":{"rendered":"http:\/\/aky.pbv.mybluehost.me\/?p=36272"},"modified":"2023-08-15T16:02:38","modified_gmt":"2023-08-15T20:02:38","slug":"negative-volume-index","status":"publish","type":"post","link":"https:\/\/aky.pbv.mybluehost.me\/negative-volume-index\/","title":{"rendered":"Negative Volume Index – Trading with the NVI Indicator"},"content":{"rendered":"\n

The Negative Volume Index (NVI) is a cumulative indicator that shows how days of low volume affect price movements<\/strong>. <\/strong>Opposite to the Positive Volume Index (PVI), which generates trading signals based on an increase in trading volume, NVI focuses on down-volume days.<\/p>\n\n\n\n

In this blog post, we take an in-depth look at the NVI and the differences and similarities to the PVI. We also review its calculation and examine how to recognize NVI\u2019s signals.<\/p>\n\n\n\n\n\n

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What is the Negative Volume Index?<\/h2>\n\n\n\n

The NVI indicator assumes that large-scale investors (\u201csmart money\u201d) – like institutional investors and funds – are more active when the trading volume is low. In other words, the NVI tracks the movements of professional investors by monitoring day-on-day volume changes<\/strong>.\u00a0<\/p>\n\n\n\n

This is based on the idea that days of significantly high volume are periods when \u201cuninformed\u201d investors dominate the market.\u00a0<\/p>\n\n\n\n

The NVI appears as a technical indication line that uses the security\u2019s price and volume to help traders see price changes on down-volume days. <\/p>\n\n\n\n

Just like the PVI, the NVI was also designed by Paul Dysart in the 1930s. The two indicators became increasingly popular in the 1970s following the launch of Norman Fosback\u2019s book \u201cStock Market Logic.\u201d<\/p>\n\n\n\n

The NVI is considered among the best trendlines for monitoring smart money investors\u2019 actions<\/strong>. As opposed to the NVI, the PVI trendlines are more related to periods of increased volume, which come as a result of the involvement of both smart money and noise traders in the market.\u00a0<\/p>\n\n\n\n

The NVI is particularly useful when a security\u2019s price declines following a period of high-volume trading<\/strong>. While the indicator primarily tracks the trading moves of smart money investors, it is generally advised to use NVI and PVI in conjunction. Together, they provide a broader picture of how a security\u2019s price is affected by the volume.\u00a0<\/p>\n\n\n

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Negative Volume Index \u2013 Trading with the NVI Indicator<\/div><\/div>
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