Price Volume Trend combines percentage price change and volume to confirm the strength of price trends or through divergences, warn of weak price moves. Unlike other price-volume indicators, the Price Volume Trend takes into consideration the percentage increase or decrease in price, rather than just simply adding or subtracting volume based on whether the current price is higher than the previous day's price. How the formula is calculated is presented below: 1. On an up day, the volume is multiplied by the percentage price increase between the current close and the previous time-period's close. This value is then added to the previous day's Price Volume Trend value. 2. On a down day, the volume is multiplied by the percentage price decrease between the current close and the previous time-period's close. This value is then added to the previous day's Price Volume Trend value. When the price increases that time if price volume trend also increase then it will be a upward trend. Similarly when price goes down and same time price volume trend also goes down it will be a downward trend. Now notice very carefully when the price of this share was increasing but Price volume trend was not increasing. So we can assume that this upward trend is not strong enough. Similarly when price decrease but price volume trend is not increase then the downtrend will not be strong enough.
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