Volume Ratio (VR)
factor.formula
The calculation formula of up volume (A) is:
Downward volume (B) calculation formula:
Volume Relative Strength Index (VR) calculation formula:
in:
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Closing price of the day: Indicates the stock price at the end of the current trading day.
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Previous day's closing price: indicates the stock price at the end of the previous trading day. It is used to compare the change direction of the closing price of the day.
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Daily trading volume: It indicates the total number of stock transactions or shares completed during the current trading day. It is an important indicator to measure market activity.
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The rising volume on the i-th trading day: When the closing price of the day is higher than the closing price of the previous day, A_i is equal to the trading volume of the day, otherwise it is 0.
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The falling volume on the i-th trading day: When the closing price of the day is lower than the closing price of the previous day, B_i is equal to the trading volume of the day, otherwise it is 0.
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The sum of X values in N periods: represents the cumulative sum of the values of X in the past N trading days.
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Calculation period: indicates the number of historical trading days used to calculate the VR indicator. The default value is 20, which can be adjusted according to different trading strategies and market conditions. Shorter periods are usually more sensitive to price changes, while longer periods are smoother and can reduce noise.
factor.explanation
The volume relative strength index (VR) measures the power of buyers and sellers in the market by comparing the ratio of the total volume of the stock price rising days to the total volume of the stock price falling days within N periods. When the VR value is high, it indicates that the market buyer power is strong and the stock price may be overbought. Conversely, when the VR value is low, it indicates that the market seller power is strong and the stock price may be oversold. Investors can use the changes in the VR indicator to assist in judging the potential trend of the market, and combine other technical indicators and fundamental analysis to develop more effective trading strategies. This indicator is particularly suitable for medium-term trend analysis, helping investors identify potential buying and selling opportunities for stocks. It should be noted that the volume data itself has a certain amount of noise, and it needs to be verified in combination with other analytical methods when used.