Price volume trend is a volume indicator.
As a volume indicator, price volume trend indicator is used to measure momentum as well as buying and selling pressure of a given security.
Price volume trend indicator is considered to be the same as on balance volume.
Despite the Price volume trend(PVT) and on balance volume(OBV) considered to be the same,they differ on the fact that in on balance volume you only add or subtract the total daily volume while in price volume trend(PVT), it only adds a portion of the volume multiplied by the percentage change of the close price divide by the previous close.
Just like other volume based indicators,Price volume trend is also based on divergence.
The values of Price volume trend is therefore calculated using the following formula;
Price volume trend(PVT)= [{(Current close - previous close)/previous close}*100]+ previous Price volume trend(PVT)
Therefore, we can further explain price volume trend based on bullish and bearish condition as follows;
1. price volume trend cryptocurrency bullish condition
Since price volume trend is based on divergence,it therefore follows that when the price is moving downwards while the price volume trend is moving upwards,the price will reverse and start moving in the same direction upwards as the price volume trend.This will signal the cryptocurrency trader to purchase a given amount of cryptocurrency with their USDT balance. The cryptocurrency trader can either decide to place a market buy order which will instantly be processed or they can place a limit buy order which will be processed when the market reaches their limit buy order price. This is indicated as from below;
The above is the TRX market against USDT. Two points are being indicated. There is point A and point B. Point A is the divergence point while point B is the price volume trend. At point A, the price in the market was moving downwards while the price volume trend was moving upwards. The market then reversed and start moving in the same direction upwards as the price volume trend. This signals the cryptocurrency trader to purchase a given amount of cryptocurrency with their USDT balance. The cryptocurrency trader can either decide to place a market buy order or a limit buy order. The market buy order will instantly be processed while the limit buy order will be executed when the market reaches their buy limit order price. When the order is being processed,the account of the trader will start increasing in value.
2. price volume trend cryptocurrency bearish condition
Since price volume trend is based on divergence,it therefore follows that when the price is moving upwards while the price volume trend is moving downwards,the price will reverse and start moving in the same direction downwards as the price volume trend.This will signal the cryptocurrency trader to sell a given amount of cryptocurrency which he had previously purchased and is currently holding to avoid declining the value of their trading account. The cryptocurrency trader can either decide to place a market sell order which will instantly be processed or they can place a limit sell order which will be processed when the market reaches their limit sell order price. This is indicated as from below;
The above is the TRX market against USDT. Two points are being indicated. There is point A and point B. Point B is the divergence point while point A is the price volume trend. At point A, the price in the market was moving upwards while the price volume trend was moving downwards. The market then reversed and start moving in the same direction downwards as the price volume trend. This signals the cryptocurrency trader to sell a given amount of cryptocurrency which he had previously purchased to avoid declining the value of their account. The cryptocurrency trader can either decide to place a market sell order or a limit sell order. The market sell order will instantly be processed while the limit sell order will be executed when the market reaches their sell limit order price. When the order is being processed,the account of the trader will have increased in value in terms of USDT.
cryptocurrency market is a highly volatile market. As a cryptocurrency trader,whenever you place a buy order,always make sure to apply risk management so that whenever your buy order goes against you, your account do not depreciate so much in value.
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