The positive volume index (PVI) is an indicator which tracks volume as it increases from the previous day. It was first introduced by Norman ...PricingAboutUsContactUsBlogTradingVideosTradingRiskDayTradingRulesCandlesticksChartPatternsBasicsofStockTradingDayTradingforBeginnersIntrotoChartPatternsMomentumIndicatorsTradingStrategiesStartTrialLogInHome/TechnicalAnalysis/VolumeIndicators/PositiveVolumeIndex–FormulaandRealTradeExamplesPositiveVolumeIndex–FormulaandRealTradeExamplesVolumeIndicators22June2019,AlHillShareTweetGoogleLinkedinRedditTableofContentsPositiveVolumeIndexDefinitionPVITradingSignalsPositiveVolumeIndexFormulaPositiveVolumeIndexChartExampleExtremePVIReadingsHigherReadingsDoesNotEqualHigherPricesNotaTimingToolPVIandVolatilePennyStocksSummaryHowCanTradingSimHelp?ExternalReferencesPositiveVolumeIndexDefinitionThepositivevolumeindex(PVI)isanindicatorwhichtracksvolumeasitincreasesfromthepreviousday.ItwasfirstintroducedbyNormanFosbackinthebookStockMarketLogic.[1]Thebeliefbehindtheindicatoristhatasvolumeincreases,theinvestmentcommunityisunifiedwiththecurrentdirectionofthemarket.Asthisindicatorshowstheactionsofthemajority,itisoftenusedasacontrarianindicator.ManyprofessionaltradersutilizethePVItoassesswhatthesmartmoneyisdoinginthemarket.Theassumptionisthatonquietdays,largeinstitutionsareactiveinthemarket.PVITradingSignalsThemostpopularsignalforthepositivevolumeindexiswhentheindexdropsbelowits1-yearmovingaverage.Fosbackbelievesthatwhenthisoccurs,thereisa67%probabilitythatabearmarketisfastapproaching.PositiveVolumeIndexFormulaIfthecurrentvolumeisgreaterthanthepreviousday,thenthePVIformulaisasfollows[2]:PVI=PreviousPVI+((Close–PreviousClose)/PreviousClose)*PreviousPVI))Conversely,ifthecurrentday’svolumeislessthanthepreviousday’svolume,thentheformulaforPositiveVolumeIndexisas:PVI=PreviousPVIPositiveVolumeIndexChartExampleTheindicatoriseasytoassessonthechart.Italmostmakesyouwonderifit’sreallynecessaryorifyoucancontinuetouseasimple200-periodSMAonthechartandcallitaday