Time Segmented Volume
What Is Time Segmented Volume?
Time segmented volume (TSV) is a technical analysis indicator developed by Worden Brothers Inc. that portions a stock's price and volume as per specific time spans. The price and volume data is then compared to uncover periods of accumulation (buying) and distribution (selling).
Understanding Time Segmented Volume
TSV is a leading indicator on the grounds that its movement depends on both the stock's price fluctuation and volume. Ideal entry and exit points are commonly found as the stock gets across the baseline level. This indicator is like on-balance volume (OBV) on the grounds that it measures the amount of money flowing in or out of a specific stock.
TSV is a proprietary technical indicator developed by Worden Brothers Inc., classified as a oscillator. It is calculated by looking at different time portions of both price and volume. TSV basically measures the amount of money flowing in or out of a specific stock. The baseline addresses the zero line.
At the point when TSV gets up through the zero line, it signals positive accumulation or buying pressure. This action is considered bullish. Conversely, when TSV crosses below the zero line, it shows distribution or selling pressure, which regularly goes before a drop down in price.
As per Worden, something important to search for when deciphering TSV is a contradiction of trends among price and TSV. Search for positive or negative divergences among price and TSV to decide possible tops and bottoms.
Several consecutive divergences increase the reliability factor in attempting to pinpoint price inversions. For example, on the off chance that a price has been making progressively higher highs while TSV has been making progressively worse high points, this would constitute a series of negative divergences. This would be an indication of a potential top.
You can work out a TSV on a wide assortment of moving averages. As you increase the value of the moving average the outcome is a smoothing effect. Be that as it may, there is a compromise. As you increase the length of the moving average, the indicator turns out to be less sensitive to daily fluctuations. Thus, the indicator will have a greater inclination to lag price.
One of the highlights of this indicator is the ability to compute a moving average of another moving average. This addition has made TSV more effective and simpler to utilize. Presently you can work out a moving average of a generally smoothed TSV and use it much similarly the MACD (moving average convergence divergence) indicator is utilized. Positive and negative TSV hybrids are something more to consider while attempting to form an opinion on a specific stock or market index.
Time Segmented Volume Example
Suppose a technical trading firm is trading a commodity like oil futures. The firm has a percentage target they need to hit for their profits, yet the price point where they open their position it doesn't be guaranteed to issue.
Utilizing the TSV indicator, the firm sets a purchase order that triggers when the indicator passes beyond the baseline, demonstrating the oil future may be oversold. The firm's software purchases the position, and it would be sold when the inverse of the oversold indicator is hit, or their profit percentage target is met.
Features
- Time segmented volume (TSV) is a technical analysis indicator that portions a stock's price and volume by spans.
- While TSV is an indicator of money moving into and out of a stock, it's anything but a standalone price-measuring instrument.
- Investors might gather more data throughout a longer time period for a more complete picture, yet a long lag time could influence daily trading designs.
- As per the engineer, spotting disparities between the TSV and stock price is an effective method for deciding conceivable entry and exit points.
