Ever wondered why some price moves stick around while others disappear faster than your morning coffee? The secret lies in volume — the real engine behind every price movement. That's where the Price-Volume Trend (PVT) indicator becomes your trading compass.
The Price-Volume Trend indicator is a cumulative momentum tool that tracks buying and selling pressure over time. It combines price and volume data to show you whether the moves behind a trend are genuine or just market noise. Unlike basic volume indicators that only tell you how much trading happened, the PVT reveals whether that volume actually supports the trend or fights against it.
Here's how it works: when prices close higher than yesterday, the PVT adds that day's volume to a running total. When prices close lower, it subtracts the volume. This creates a cumulative line that tracks real buying and selling pressure. When both price and PVT climb together, you're seeing authentic buying interest. When they start moving in opposite directions? That's your early warning system for potential trend changes.
Think of it as a truth detector for price movements — separating real market conviction from temporary excitement.