What it is
On Balance Volume treats a 1 point rise and a 50 point rise the same. PVT fixes that by scaling each candle's volume by how far price actually moved. Quiet drifts add little, strong moves on heavy volume add a lot.
It has no settings to tune. Its absolute level means nothing; the slope and its agreement with price are what count. On CFDs it is built on tick volume.
How it is calculated
1. Work out the percentage change in close: (close minus previous close) / previous close. 2. Multiply that by the candle's volume. 3. PVT = the previous PVT plus this value.
How to read it
How to trade it
- 1
On a 1 hour NAS100 chart, check that PVT is rising along with price before trading the trend.
- 2
Wait for a pullback to a support level or a moving average while PVT holds above its own average.
- 3
Enter long on a bullish candle closing off support.
- 4
Stop below the pullback low, for example 40 to 70 points on NAS100.
- 5
Target the last swing high or 2 times the stop; take profits early if PVT starts to diverge.
The trend long is cancelled if PVT closes below its own average and price closes below the pullback low.
WickSpeak writes a plain-English reading of PVT on the live candle: what it is, whether volume is backing the move now, how to trade it and what would prove it wrong. In Playbook, a condition can check when PVT crosses above or below its own average, is above or below its own average, or is rising or falling.
Best markets and timeframes
Most reliable on stocks and futures with exchange volume. On gold, indices and forex CFDs it works with tick volume on 1 hour and higher charts, mainly for confirmation and divergence.
Common mistakes
- Reading the number itself. Only direction and divergence matter.
- Assuming it gives entry timing. It confirms or questions a move; it does not time it.
- Using it in the quiet overnight hours, where tick volume is thin and readings flatten.
Works well with
Questions traders ask
What is the difference between PVT and OBV?
OBV adds or subtracts the full volume depending on whether price closed up or down. PVT multiplies volume by the size of the percentage move, so large moves count more and tiny moves count less.
How do you read Price Volume Trend?
Look at the direction. Rising PVT with rising price confirms the move; disagreement between them is a divergence and a warning.
Does PVT have settings?
The line itself has none. Many traders add a moving average of PVT to get crossover signals.
Is Price Volume Trend the same as Volume Price Trend?
Yes, both names are used for the same indicator.