Upside/Downside Ratio

AAA

DEFINITION of 'Upside/Downside Ratio'

A technical indicator that shows the relationship between the volumes of advancing and declining issues on an exchange - in particular, the New York Stock Exchange. The upside/downside ratio is used to determine the momentum of the market at any particular time.


The ratio is calculated as follows:


Advancing Issues / Declining issues


Where


Advancing Issues = Total volume traded of securities that closed above their opening price Declining Issues = Total volume traded of securities that closed below their opening price

INVESTOPEDIA EXPLAINS 'Upside/Downside Ratio'

The upside/downside ratio is often smoothed using a standard moving average or other type of moving average to filter out smaller, less significant movements. Values greater than 1 are generated when more issues are advancing than declining, in terms of volume. Values less than 1 are created when more issues are declining than advancing, in terms of volume. The upside/downside ratio is often used to gauge over-bought and over-sold conditions in the market. Low values can indicate that the market is becoming over-sold and high value can demonstrate that the market is becoming over-bought. The upside/downside ratio is available as a technical indicator on many trading platforms.

RELATED TERMS
  1. Advance/Decline Line - A/D

    A technical indicator that plots changes in the value of the ...
  2. Bear

    An investor who believes that a particular security or market ...
  3. Volume

    The number of shares or contracts traded in a security or an ...
  4. Upside

    The potential dollar or percentage amount by which the market ...
  5. New York Stock Exchange - NYSE

    A stock exchange based in New York City, which is considered ...
  6. Bull

    An investor who thinks the market, a specific security or an ...
Related Articles
  1. Trading Strategies

    3 Key Signs Of A Market Top

  2. Active Trading

    Accumulative Swing Index And The McClellan ...

  3. Active Trading Fundamentals

    Market Breadth: A Directory Of Internal ...

  4. Technical Indicators

    Are Bollinger BandsĀ® useful for analyzing ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center