24 basic indicators (19)-VR

Volume ratio indicator-VR

VR indicators are also called turnover rate indicators, quantity indicators, or capacity indicators. They are all called volume ratio in English and are short-term technical analysis tools focusing on the relationship between volume and price.

Section 1 principles and calculation methods of VR indicators

I. Principles of VR indicators

VR indicators are technical indicators by means of studying the relationship between stock volume and price. The theoretical basis is "volume-price theory" and "anti-market operation theory ". VR indicators believe that due to the basic principles of volume first, volume increase, volume decrease, volume and price synchronization, volume and price deviation, etc., the volume remains unchanged in the market. Therefore, observe the changes in rising and falling transaction volume, which can be used as a basis for analysis and determination of quotations. At the same time, VR indicators also believe that when the popularity of the market begins to converge and the stock price begins to rise and is on the way up, investors should follow the trend, when the market is very popular or extremely pessimistic, and the stock price is soaring or slump, smart investors should leave or enter the market. Therefore, anti-market operations are also a function displayed by VR indicators.
In general, the sales volume of low-price and high-price zones can be expressed through the transaction volume. The VR indicators also provide the analysis and determination function of the overbought and oversold products. At the same time, VR indicators are divided by the amount in the rising period by the amount in the falling period. Therefore, VR indicators also have a concept of relative strength.
In short, VR indicators can be used to determine the supply and demand of funds and the strength of sales momentum, set the superbuy and oversell standards, and provide investors with a correct reference to determine reasonable and timely trading opportunities.

Ii. Calculation of VR indicators

The VR indicator is a medium-and short-term technical indicator by analyzing the ratio of the price (or turnover) in the price increase cycle within a certain period to the transaction volume in the price decrease cycle. Like other technical indicators, the selected calculation cycle is different, VR indicators include daily VR indicators, weekly VR indicators, monthly VR indicators, annual VR indicators, and minute VR indicators. Daily VR indicators and weekly VR indicators are often used for stock market research and determination. The daily and weekly VR indicators are often used for stock market research and determination. Although their values are different during calculation, the basic calculation method is the same.
Taking daily VR index calculation as an example, the specific calculation is as follows:
1. Calculation Formula
VR (N days) = total daily transaction volume increasing within n days; total daily transaction volume decreasing within n days
Where, n is the calculation cycle, generally the start cycle is 12
2. computing process
(1) the transaction volume on the day when the stock price has risen since N is called UV, and the sum of UV in N days is called Uvs.
(2) the transaction volume on the day when the stock price fell since the N day is called DV, and the sum of DV in the N day is called DVS.
(3) the volume on the day when the stock price has been flat since N is called PV, and the sum of PVS within n days is called PVS.
(4) The VR on the last n days can be calculated.
VR (n) = (Uvs + 1/2pvs) values (DVS + 1/2pvs)
The formula obtained here is a specific subdivision of the above formula. With the increasing popularity of stock market analysis software, in fact, the value of VR indicators is automatically completed by the computer, without the need for investors to calculate, here, we will learn more about the calculation process of VR indicators.

Section 2 General evaluation criteria of VR indicators

The general evaluation criteria of VR indicators are mainly focused on the division of VR value regions and Analysis of the cooperation between VR curves and stock price operation trends. Taking the 26-day VR index as an example, the specific analysis is as follows:

I. Division of VR value regions

According to the general standard, the VR value can be divided into four areas.
1. Low Price Zone
When the VR value range is between 40 and 70, it is a low-price area, indicating that the stock purchase and sale are scarce and the popularity is scattered. However, the investment value of some stocks may have been highlighted, and investors can start to build a small number of warehouses.
2. Security Zone
When the VR value range is between 80-, it is a safe area, indicating that the number of stock offerings has increased and popularity has begun to accumulate. Investors can hold shares to rise or increase the amount of warehouse creation.
3. Profit Area
When the VR value range is between and, in the profit area, it indicates that the stock is under the strong drive of buying a disk, and the festival is rising. Investors should take advantage of most of the lucrative chips in a timely manner.
4. Alert Area
When the VR value is between 450 and above, it is a warning area, indicating that the rise of the stock price has exceeded the phenomenon, and it is difficult to keep up with the market funds in the future, the stock price may be subject to a large downward trend at any time. Investors should sell the shares decisively and hold the currency to wait and see.

Ii. Combination of VR curve and Stock Price Curve

1. When the VR curve starts to rise in the lower-price zone and the transaction volume begins to gradually increase, if the stock price increases slightly, it indicates that the main funds in the market start to intervene, and investors can start to create a warehouse to buy.
2. When the VR curve breaks through the low price zone, if the stock price curve is also up, it indicates that the stock price has started to rise, and investors should increase their buying strength.
3. When the VR curve breaks through the low price zone, if the stock price curve is also up, it indicates that the rise of the stock price begins to increase. Investors can hold shares all the way until the VR curve shows signs of turning down.
4. When the VR curve continues to rise after entering the security zone, if the stock price curve is being resized, it indicates that the stock exchange in this range is sufficient, and the main force may be brewing to raise the market, investors should firmly hold their shares to go up, and short-term experts can increase their buying strength.
5. When the VR curve enters the warning area, if VR starts to turn down and the stock price curve is still rising, it may mean that the stock price has exceeded the price, investors should pay close attention to the stock price trend. Once the stock price curve also begins to fall, they should sell all the stocks in a timely manner,
6. When the VR curve is in a low-price area, if the VR curve starts to rise slowly while the stock price curve is still falling, it may mean that the stock price is oversold, investors can build a warehouse at a low level.

Section 3 Special Analysis Methods of VR indicators

The special analysis methods of VR indicators mainly focus on the shape of VR curves and the deviation of VR curves.

1. VR curve form

The various forms of VR curves are also an analysis method that determines the market trend and the timing of buying and selling.
1. When the VR curve Forms M-headed or triple-peaked top reversal at a high position, it may indicate that the stock price has changed from strong to weak. The stock price is about to drop sharply and should be sold in time. If the stock price curve also appears in the same form, it can be confirmed that the decline can be determined using M-headed or triplicate theory.
2. When the VR curve shows a bottom-W or a bottom-heavy reverse pattern at a low position, it may indicate that the stock price has changed from weak to strong, and the stock price is about to rebound upwards, so that a small amount of shares can be absorbed at a low position. If the stock price curve also appears in the same form, the increase can be determined by the W bottom or triple bottom theory.
3. The accuracy of m head and triple top shape in VR curve is higher than W bottom and triple bottom.

Ii. VR curve Deviation

The deviation of the VR curve is that the trend direction of the curve of the VR indicator is exactly the opposite of that of the K-line chart. There are two kinds of VR indicator deviations: Top deviation and bottom deviation.
When the stock trend on the K-line chart is one-to-one peak, the stock price continues to rise, and the trend of VR indicators on the VR curve is one-to-one peak, which is called a top deviation. The top deviation is generally a signal that the stock price will reverse at a high position, indicating that the stock price is about to fall in the short term, which is a signal of selling.
When the stock trend on the K-line chart is lower than the peak, the stock price is falling, while the trend of VR indicators on the VR curve is lower at the bottom of the base, this is the bottom deviation. The bottom deviation is generally a signal that the stock price will reverse at a low position, indicating that the stock price is about to rise in the short term, which is a signal of buying.
Similar to the deviation of other technical indicators, the accuracy of top deviation is higher than that of bottom deviation in VR deviation. When the stock price is at a high level and VR is at a high level, you can think that the stock price is about to reverse down, and investors can sell the stock in time.

Section 4 practical skills of VR indicators

VR indicators are easy to construct and have only one VR curve. Therefore, compared with other indicators, VR indicators are easy to understand, and practical skills are mainly focused on the Operation direction of VR curves. Because VR indicators are too simple, we can use VR indicators and OBV indicators to determine the market more accurately. The following uses analytics' VR indicators as an example to reveal their sales and wait-and-view functions.

I. Sales Signals

1. When the VR curve is running at a bottom lower than the bottom, while the OBV curve is running at a bottom higher than the bottom, the stock price also breaks through the medium-and short-term average, it indicates that the VR indicators and OBV experienced a baseline deviation, which is a short-term buying signal from the VR indicators. (15-1.
2. When the VR curve is running at the top of the curve and the OBV curve is running at the top of the curve, and the stock price breaks down the short-term moving average, it indicates that VR indicators and OBV experienced a top deviation trend, which is a short-term sales signal from VR indicators. (15-2.

Ii. Currency Ownership Signal

1. When the VR curve and the OBV curve almost get rid of the Low-position consolidation pattern and go up rapidly, if the stock price also rises based on the short-term moving average, it means that the medium-and short-term upward trend of the stock price has been formed, this is a signal from VR indicators that shares are about to rise. (15-3.
2. When the VR curve and the OBV curve fall down from a high position, if the stock price is also suppressed by the medium-and short-term moving average, it means that the medium-and short-term decline trend of the stock price has been formed, this is the currency holding signal issued by VR indicators.