Volume

Volume tends to increase in the direction of the prevailing trend. In the chart below, we see an upward trend with increasing volume. This is good. It tells me that buyers are increasing and more people are coming in buying. This pushes the stock price upward. A bad sign is when the stock price turns downward on higher volume. This means that many sellers are starting to creep into the market and overtake the buyers. This tends to change the trend direction downward for quite some time.



RSI

RSI stands for Relative Strength Index. It is best used in a sideways range. However, there are advanced ways of using it in a trend, which you see used in my daily commentaries. The traditional way to use it is this: Buy when the RSI goes below the 30 level AND comes back up above it. Sell when the RSI goes above the 70 level AND then comes back down below it.

The most common used period for RSI is 14 however, some use the 9 period.



The most effective way to use it in a trend is to look for trend line breaks that usually foreshadow the actual trend line breaks to come in the actual price. The momentum change tends to precede the price changing. When the momentum breaks down in the RSI, its not usually long before it does this in the actual price itself too. However, let a RSI trend line break get you ready for what may come. Place your trade on the actual price breaking its own trend line. See an example in the chart below:

Notice how the RSI breaks its green trend line before the price itself really breaks down. Also note the lower highs on the RSI before the price action starts to show it. The momentum in the RSI tends to change before it actually shows up in the price itself.