6.5 help:
The following formula uses the cum() function (see Cumulate) to calculate the Price Volume Trend:
cum( ((C - ref(C,-1)) / ref(C,-1)) * V)
This formula also can be written using the roc() function (see page Rate of Change) as shown below:
cum( roc(close, 1, %) * volume )
The Price Volume Trend (PVT) is similar in concept to On Balance Volume (see On Balance Volume) in that it is a cumulative total of volume that is adjusted depending on changes in closing prices. But whereas OBV adds all volume on days when prices close higher and subtracts all volume on days when prices close lower, the PVT adds only a portion of the daily volume. The amount of volume added to the PVT is a function of the amount by which prices rose or fell relative to the previous day's close.
PVT = (((C-ref(C,-1)) / ref(C,-1)) * V) + I
Where:
C = Today's closing price
ref(C,-1) = Yesterday's closing price
V = Today's volume
I = Yesterday's Price Volume Trend
The PVT is calculated by multiplying the day's volume by the percentage change of the underlying security and adding this value to a cumulative total. For example, if the security closed up 0.5% and volume was 10,000 shares, we would add 50 (i.e., 0.005 * 10,000 = 50) to the PVT. If the security had closed down 0.5%, we would have subtracted 50 from the PVT.
See Plotting an Indicator for more information on plotting indicators. See Price Volume Trend for more information on the PVT parameters.
The interpretation of the Price Volume Trend is similar to the interpretation of On Balance Volume (see On Balance Volume) and the Volume Accumulation/Distribution Line (see Accumulation/Distribution).
Many investors feel that the PVT more accurately illustrates the flow of money into and out of a security than does OBV. This is because OBV adds the same amount of volume to the indicator regardless of whether the security closes up a fraction of a point or doubles in price. However, the PVT adds only a small portion of volume to the indicator when the price changes by a small percentage and adds a large portion of volume to the indicator when prices change by a large percentage.
This is from 6.5 try "price Volume Trend" for help. It is so much more logical than OBV. |
