AVL (Average Line) and Volume indicators on a trading chart provide insight into the market's price action and trading activity. Here’s how to understand these indicators across different timeframes:
AVL (Average Line):
Definition: The AVL represents the average price level over a certain period on the chart, which can act as a dynamic support or resistance line.
Different Timeframes: On each timeframe (5m, 15m, 30m, 1h, 1d, etc.), the AVL will differ because it calculates the average based on the specific period.
Lower Timeframes (e.g., 5m, 15m): The AVL will react more quickly to price movements, showing more frequent changes. It can be useful for identifying short-term support/resistance levels.
Higher Timeframes (e.g., 1d, 1w): The AVL will be smoother and provide a broader view of market trends. It is better for understanding long-term trends.
Volume Indicator:
Definition: Volume shows the number of units traded in the market during a specific period. Higher volume indicates more activity and potential strength in a price move.
Volume (5, 10): This means the volume is averaged over the last 5 and 10 periods, respectively. It provides a smoothed view of trading activity.
Different Timeframes: Lower Timeframes (5m, 15m): Volume spikes can indicate short-term interest in the asset. Frequent changes in volume help in identifying intraday trading opportunities.
Higher Timeframes (1d, 1w): Volume trends over longer periods help assess the overall strength of a trend. Sustained high volume over time may confirm a strong upward or downward trend.
Understanding AVL and volume together helps in gauging the strength of price movements and market trends across different timeframes.
