Trade Volume Index - TVI

See: Trading Volume.

You know those bands that a very small number of people really, really like, and everyone else kinda thinks of them as okay, but not worth building an entire Facebook fan page? You know...the Cures, and Smiths, and Radioheads of the world?

Sometimes, stock market moves can be like that. There's a big move (lots of passion), but not much broad support (it happens without a lot of volume).

Volume measures the amount of shares that trade hands during a given period of time. All things being equal, a price move with more volume has more chance of auguring a real long-term trend. So if shares rise 2% on low volume, people will be like, "Yeah, great, let's see what happens tomorrow." If they rise 2% on record-breaking volume, people are more likely to say to themselves, "Where can I get more margin to buy into this sucker?"

The trade volume index helps put those judgments in quantitative form. It's a technical indicator that takes both price and volume into effect. It lets traders see at a glance whether moves have some oomph behind them, or if they have a high probablity of reversing in the near future.