Volume and Open Interest
Price‐based volume oscillators incorporate price data in their construction,
whereas non-price‐based volume oscillators only incorporate volume data in their
construction. It should be noted that reading price‐based volume oscillator diver-
gence differs from reading non-price‐based volume oscillator divergence. Some
popular price‐based volume oscillators include:■ (^) On Balance Volume (OBV)
■ (^) Accumulation/Distribution Line (ADL)
■ (^) Chaikin Money Flow
■ (^) Chaikin Oscillator
■ (^) Demand Index
■ (^) Herrick Payoff Index
Some non-price‐based volume oscillators include:
■ (^) Standard Volume Bars
■ (^) Smoothed Volume
■ (^) Detrended Volume
■ (^) Rate of Change of Volume (ROC Volume)
■ (^) Percentage Volume Oscillator (PVO)
Figure 6.7 summarizes the way divergence is read for each classification. The
main difference between the two classifications is how bullish divergence and
bearish confirmation are observed on the charts. Bearish divergence and bullish
confirmation are read the same way for both classifications.
fIgure 6.7 Reading Volume Divergence on Non-Price‐Based versus Price‐Based Vol-
ume Oscillators.