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Tuesday, June 17, 2014

Weekly Investment Term #5

I'm not a believer of technical analysis but I heard a lot of people in the investment industry look at the technical analysis and try to understand the trend and behaviour of the stock moving forward by looking at the chart. 

Well, I'm no expert to it but if you are interested, here is one term that you should understand: Trade Volume Index (TVI)

A technical indicator that measures the amount of money flowing in and out of an asset. Unlike many technical indicators, the TVI is generally created using intraday price data. The underlying assumption of this indicator is that there is buying pressure when the price trades near the asking price and selling pressure when it trades near the bid. The TVI is actually very similar to the on balance volume indicator but it takes the volume attributable to every trade instead of just the closing volume. 

Generally, TVI helps investors to identify which security is being accumulated (buy) and which are being distributed (sold). 

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